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UBS analyst suggests $130-$137B should be table stakes for Verizon bid for outright ownership of Verizon Wireless

Verizon Could Pay VOD $130B+ for Wireless Stake

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
4/29/2013
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Think US$100 billion sounds high? Verizon Communications Inc. could pay Vodafone Group PLC up to $137 billion for outright ownership of Verizon Wireless, according to a UBS Securities LLC research note Monday. Analyst John Hodulik did the math, which is actually quite simple:

    We believe Verizon and Vodafone's on-and-off negotiations (often in the press) will pay off with a deal later this year, to the benefit of both companies. Our read of the situation suggests that VZ is willing to pay 7.5-8.0x 2013 EBITDA but Vodafone is looking for 10x. Therefore, we believe the two companies will have to meet in the middle at say, 8.5-9.0x for a deal to happen. This suggests a deal price of US$130B-137B.
That's even higher than the potential $100 billion bid Reuters reported on last week. Vodafone investors have been calling for a larger bid. Vodafone holds a 45 percent stake in Verizon Wireless. Rumors of a buyout have heated up again in the last few months. — Dan Jones, Site Editor, Light Reading Mobile

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wanlord
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wanlord,
User Rank: Light Sabre
4/29/2013 | 7:42:38 PM
re: Verizon Could Pay VOD $130B+ for Wireless Stake
VZT Wireline would have more control to eliminate overlap, merge networks, reduce headcount, etc. Good short term things. Long term, lack of influence from VOD which keeps VZW a somewhat separate entity which has less overhead and moves quicker would mean they would eventually be absorbed into the slow, money losing telecom culture. It's a bad idea...
DanJonesLRMobile
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DanJonesLRMobile,
User Rank: Light Sabre
4/29/2013 | 3:56:35 PM
re: Verizon Could Pay VOD $130B+ for Wireless Stake
That's a lot of money for what would outwardly change little.
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