It appears that Verizon Communications may have to dig a bit deeper into its pockets if it wants to wrestle full control of Verizon Wireless away from Vodafone.
Reuters this morning reported that six “major Vodafone investors” claimed the reported $100 million Verizon is looking to offer to acquire Vodafone’s 45% stake in Verizon Wireless is at least $20 billion short. Reuters reported last week that Verizon had hired advisers to craft a possible $100 billion buyout of the 45% stake in Verizon Wireless it does not currently own.
Today’s Reuters report noted that those six shareholders controlled a combined 1.3 billion Vodafone shares, and that they feared a sellout of Vodafone’s stake in Verizon Wireless would further open up the international conglomerate to the fickle European market. Verizon Wireless, which is the most profitable domestic operator, has over the 18 months paid out $18.5 billion in dividend payments to its parent companies.
Analysts reported that at a meeting with Verizon executives last week, current CEO Lowell McAdam said that buying out Vodafone’s stake in Verizon Wireless is the “No. 1” move the company could make to increase shareholder value. While financially successful, Verizon is only raking in 55% of Verizon Wireless’ profits, which puts its actual income from its wireless operations at less than what rival AT&T is garnering from its complete control of AT&T Mobility. Verizon Wireless posted $6.4 billion in operating income for the first quarter of this year while AT&T Mobility reported $4.6 billion in net income for the first quarter.
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