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