Newspaper article The Evening Standard (London, England)

Vodafone Tops Footsie after City Talk of an Approach by Verizon; MARKET ROUND-UP

Newspaper article The Evening Standard (London, England)

Vodafone Tops Footsie after City Talk of an Approach by Verizon; MARKET ROUND-UP

Article excerpt

Byline: Toby Green

COULD Verizon really make a play for Vodafone? It may sound like a rather far-fetched idea, but that didn't stop it being discussed in the Square Mile today. The telecom giants are already closely tied thanks to their US joint venture Verizon Wireless.

However, according to Morgan Stanley's Nick Delfas, their share prices imply a difference of more than $100 billion ([pounds sterling]63.1 billion) between how their investors value the business.

Saying that Vodafone was "clearly more attractively valued", the analyst went on to speculate about this gap can be bridged.

"The classical resolution would be for the more highly rated company to buy out the weaker," he claimed, although he did admit that the amount of money Verizon would need to fund such a move was just one potential barrier.

He also suggested an agreed merger between the two as well as the possibility of Vodafone selling some or all of its Verizon Wireless stake, both possibilities which have been floated before. However, on the former the analyst warned the valuation difference would cause problems while the latter "would have complex tax implications".

Among the other scenarios he suggested that could close the gap was the payment of another dividend by Verizon Wireless, which he predicted could happen at the end of the year or towards the start of 2013.

In response, Vodafone ended up topping the blue-chip index, jumping 2.65p to 170.05p. Its defensive qualities were also helping with risers at a premium as the FTSE 100 headed back south, slumping 66.8 points to 5,894.31.

The miners were the main drag after BHP Billiton -- which dropped 60.5p to 1987.5p -- sent its peers into the red by announcing iron ore demand from China was "flattening".

Whitbread climbed 11p to 1732.5p as Morgan Stanley became the latest to call for the leisure giant to spin-off its Costa Coffee business. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.