Verizon Communications provided a bit of sanity to rumors this week that it was looking to partner with AT&T for a potential acquisition of international telecommunications giant Vodafone.
Bloomberg is reporting that Verizon has denied the rumor, claiming it has no plans “to merge with or make an offer for Vodafone, whether alone or in conjunction with others.” The news was disappointing to Vodafone shareholders, who sent the company’s stock (VOD) down the approximately 3% it gained yesterday.
This week’s rumor was initially announced by the Financial Times citing “usually reliable people” that Verizon and AT&T were in talks to produce a $245 billion acquisition of Vodafone. The deal would land Verizon the 45% stake in Verizon Wireless currently controlled by Vodafone, while AT&T would take over Vodafone’s international operations.
Verizon’s stock (VZ) was trading down slightly this morning, after having a relatively flat day on Tuesday. AT&T’s stock (T) was also down slightly this morning, after receiving a slight bump following the initial rumor.
Analysts were initially a bit skeptical of the rumor, noting the complexity of such a deal and regulatory challenges that would follow.
“Although we would see the logic on the [Verizon] side if true, we question what [AT&T’s] strategy is here if true,” noted Jennifer Fritzsche, senior analyst at Wells Fargo Securities, in a research note. “In our view, while [Vodafone’s] European assets bring in cash flow, these also would bring a large regulatory complexity to the company.”
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