Just talking generally, he says, as remarks send Vodafone shares soaring
Cold water has been poured on renewed speculation that Vodafone’s 45 per cent stake in Verizon Wireless could soon be surrendered, a rumour that led to the UK operator’s shares rising dramatically in the past week.
It started when Lowell McAdam, CEO of Verizon Communication and which owns the other part of the US venture, said he was confident his company could agree purchase terms.
With Verizon Wireless contributing significantly to the earnings of both partners, his remarks immediately prompted speculation that Vodafone was readying for a sale – with the news sparking a sharp rise in its stock price, from a low of 156 pence on Thursday to 165 pence at close last night.
But McAdam’s comments also came at a time when Vodafone has set aside £1.5 billion to buy back its own shares and, as the stock gradually rose in value, it meant the UK operator had to pay out millions more to achieve its aims.
Conversely, if a deal was brokered on a share swap basis with Vodafone surrendering its stake in Verizon Wireless in return for stock in Verizon communications, Vodafone’s sudden price hike could make any buy-out that more expensive.
Now McAdam has been forced to play down his earlier comments. He told journalists at the Consumer Electronics Show in Las Vegas that, merely because he was confident terms could be agreed, he did not mean there was any deal imminent.
“There’s no discussions about it,” he declared, “a deal has been feasible for 10 years and there’s nothing that’s changed.”
Either way, the buy-out speculation has been good news for Vodafone’s new north and central Europe CEO Philipp Humm who bought £358,832 worth of shares in his new employer just before Christmas and who has since netted thousands from the sudden surge in the stock’s value.