Verizon rumours send Vodafone shares soaring on Nasdaq

London could follow suit this morning

Vodafone’s shares are expected to rise further when the London Stock Exchange opens later today [6th March 2013] after speculation that its US partner Verizon is looking to buy the firms’ joint venture led to a 5.16 per cent jump in its stock on Nasdaq. Verizon Wireless is 45 per cent owned by Vodafone, with the rest of the venture held by Verizon Communications whose CEO Lowell McAdam has made no secret he would like to buy out the British carrier’s share.

Helping Verizon is the fact that its own stock has risen 22 percent in the last two years while Vodafone’s value has declined significantly against the US dollar, with matters not helped by falling sales across Europe.

Now, according to Bloomberg, the divergence is such that Verizon is in a better position than ever to afford Vodafone’s stake in their combined venture.

It says that another option might be a full merger with Vodafone.

If that were to happen it would give the British operator the muscle it needs for further expansion – it is currently looking at buying Deutsch Kabel – while Verizon would benefit through the ability to expand beyond its own US shores.

Bloomberg claims talk on the matter began in December [2012] but faltered over issues of leadership and location of a new company, making a buyout or partial sale of Vodafone’s stake in Verizon Wireless more likely, it’s claimed.

It adds that Verizon is keener than ever to control Verizon Wireless, America’s second largest mobile player, because it is its most profitable division.

Further talks, suggests Bloomberg, are likely to recommence later this year.

* Footnote: In early trading in London today, Vodafone’ shares had jumped more than 6 per cent to nearly 180 pence.

About Dave Evans

Dave Evans was a long established commentator on both the IT and cellular industries. His last focus was on share price trends within the sector. He passed away in September [2014].
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