Verizon eyes roughly $100 billion bid for Vodafone’s wireless stake

NEW YORK/LONDON, Thu Apr 25, 2013 — Verizon Communications Inc. has hired advisers to prepare a possible $100 billion bid to take full control of Verizon Wireless from its partner Vodafone Group Plc, two people familiar with the matter said.

Verizon is contemplating a roughly 50:50 cash and stock bid for the 45 percent stake in Verizon Wireless it does not already own, an asset it has long coveted, the sources said. It has not put a proposal to Vodafone yet but has hired banking and legal advisers for a possible offer, the sources said late Wednesday.

There are no guarantees that Vodafone will be interested in a deal or that any bid will materialize, the sources said. But they said Verizon was ready to push aggressively and hoped to start discussions with Vodafone soon for a friendly agreement. Verizon is also prepared to take a bid public if the British company does not engage in talks, one of the sources said.

Verizon spokesman Bob Varettoni declined to comment. Vodafone declined to comment. Verizon Wireless was not available for comment.

Shares in Vodafone, the world’s second-largest mobile operator, were up 1.6 percent in London, while Verizon shares were up 1.8 percent in New York.

Verizon, which has made little secret of its wish to buy out its British partner in the biggest U.S. mobile operator, has ramped up the pressure in recent months, saying publicly that it believed it could buy the asset in a tax-efficient way. The company’s move to hire advisers and the sources’ revelation of a price range highlight the company’s seriousness about doing a deal.

At $100 billion, a deal would be the third-largest acquisition ever, according to Thomson Reuters data, and would come amid a new round of consolidation in the industry.

Investors say the conditions for a deal have improved as a result of Verizon’s strong results, its share price gains, and low interest rates. Verizon shares are valued at 17.9 times forward earnings, compared with 11.8 for Vodafone. The sources said Verizon is confident that it can raise about $50 billion of bank financing to fund a deal.

“This is a good time for both sides to think seriously about a transaction. Vodafone’s probably never going to get a better multiple than now,” New Street analyst Jonathan Chaplin said. “The growth rate (for Verizon Wireless) probably has to slow over time, particularly as Sprint and T-Mobile USA and AT&T improve.”

Verizon sees ‘significant’ impact from Sandy on fourth-quarter results

NEW YORK, Fri Nov 2, 2012 – Verizon Communications Inc. said it expected fourth-quarter results to be hurt significantly due to superstorm Sandy and that it could not estimate the impact at this time.

The provider of telephone, Internet and television services said it was directing its resources to restore communications services to affected customers, “which may take some time.”

Verizon may take up to two weeks to restore telecommunication services for some of its customers, a top executive told Reuters on Thursday.

T-Mobile USA scorns Verizon spectrum sale offer

NEW YORK, May 10, 2012 – T-Mobile USA CEO Philipp Humm said his company was not interested in wireless airwaves that its biggest rival, Verizon Wireless, has offered to sell.

Verizon Wireless said last month that it would sell spectrum in the 700 megahertz frequency band if U.S. regulators approved its proposed $3.9 billion purchase of spectrum from cable operators, a deal that T-Mobile USA has loudly opposed.

Humm told reporters on a conference call on Thursday that the spectrum Verizon Wireless is proposing to sell is not good enough to help T-Mobile USA, a unit of Deutsche Telekom.

“For us, this spectrum is not interesting,” said Humm. Some of the spectrum risks interfering with TV stations that occupy nearby spectrum bands, he said.

The interference problems “will most likely take three to six years to resolve, if at all,” Humm said, adding that the remainder of the spectrum being offered does not cover a wide enough area to be useful.

T-Mobile USA would like to have a chance to bid on the spectrum Verizon Wireless is looking to buy. Analysts say this spectrum would be much more suitable for T-Mobile USA than the airwaves being offered by its rival.

T-Mobile USA has been scrambling to improve its business and stem customer losses, which were exacerbated by a nine-month period in 2011 when the company was focused on seeking approval for its proposed $39 billion purchase by AT&T Inc. That deal collapsed in December.

Humm declined to comment directly on a Bloomberg report that Deutsche Telekom was in talks with MetroPCS Communications with an aim of merging T-Mobile USA with MetroPCS.

Instead. He said Deutsche Telekom and T-Mobile USA were still working to strengthen the U.S. business and “to evolve T-Mobile USA to become a self-funding platform.”

The company managed to slow its customer losses in the first quarter, boosting its parent company’s results, announced on Thursday.

Verizon results slightly ahead of Wall Street forecasts

NEW YORK, Thu Apr 19, 2012 – Verizon Communications Inc. posted first-quarter earnings and revenue that were slightly higher than Wall Street expectations even as wireless growth slowed from the fourth quarter.

Its mobile venture, Verizon Wireless, added 501,000 contract customers in the quarter, roughly in line with the average expectation for just over 511,000 from five analysts polled by Reuters but down from fourth quarter additions of 1.2 million.

Verizon shares rose 1.4 percent in premarket trade to $38.19 after closing at $37.66 on New York Stock Exchange Wednesday.

Given that Verizon, the first of the big operators to report first quarter results, typically posts the strongest customer growth of its peers, its sluggish growth may foretell a sharp slowdown in growth across the industry.

“People were upgrading but there doesn’t seem to be as many new people coming in to wireless,” said Piper Jaffray analyst Christopher Larsen, adding that Verizon’s mobile growth was in line with his recently lowered estimate.

However, Larsen was impressed with the company’s financials.

“It looks like it was a good quarter over all. Earnings per share was slightly ahead of the Street. Revenue was a little bit better,” Larsen said.

The slower customer growth also comes with a silver lining as the Verizon Wireless profit margin rose to 46.3 percent from 42.2 percent in the fourth quarter, when an Apple Inc. iPhone fueled growth but also required hefty subsidies.

Verizon earnings rose to $1.69 billion, or 59 cents per share compared with Wall Street expectations for 58 cents per share according to Thomson Reuters I/B/E/S. In the year-ago quarter it reported a profit of $1.44 billion, or 51 cents per share.

Revenue rose to $28.24 billion from $26.99 billion and compared with analyst expectations for $28.17 billion.

Verizon Wireless is a venture of Verizon and Vodafone Group Plc. Its biggest rival AT&T Inc. and Sprint Nextel, the No. 3 U.S. mobile service report quarterly results next week.

Verizon CFO says comfortable with January 2011 forecast

IRVING, Texas – Verizon Communications Inc chief financial officer said on Tuesday he expects to close the purchase of spectrum from cable companies by mid-year.

Fran Shammo said he sees wireless margin improving in 2012. Shammo also said he is still comfortable with a forecast he made in January 2011 related to earnings growth for 2012.

He said in January 2011 that he expected 2012 earnings growth to be double his estimate for 2011 earnings growth of 5-8 percent.

Comcast to start selling Verizon mobile early 2012

NEW YORK ― Comcast Corp., the largest U.S. cable operator, will start selling Verizon Wireless products in four markets early next year, its top cable executive said on Monday.

Comcast, Time Warner Cable Inc. and Bright House Networks last week said they had reached a deal to sell wireless spectrum to Verizon Wireless for $3.6 billion in a transaction that will also see Verizon sell cable products and the cable companies bundle Verizon wireless products.

Neil Smit, president of Comcast Cable, said his company will continue to compete with Verizon Wireless’ parent Verizon Communications Inc in markets where it offers its FiOS TV and Internet service.

Time Warner Cable, too, plans to start selling existing Verizon products in bundled packages almost immediately, said CFO Irene Esteves, who, like Smit, was speaking at a UBS investor conference.

But Time Warner Cable’s Esteves said it was too soon predict what specific new products it could bring to market with Verizon, or when those products could be available.Cable companies have previously partnered with wireless companies Sprint Nextel and Clearwire Corp. Smit said Comcast would begin to wind down its customer relationships with those companies but it would retain its 9 percent equity stake in Clearwire “for the foreseeable future.”

Verizon Wireless is co-owned by Verizon and Vodafone.

Verizon Wireless to pay $3.6 billion for cable spectrum

NEW YORK ― Verizon Wireless plans to pay $3.6 billion for wireless airwaves from a venture of cable companies Comcast Corp., Time Warner Cable Inc. and privately held Bright House Networks.

The deal, which includes the option for cable companies to resell Verizon Wireless service, comes as Verizon’s biggest rival AT&T Inc is facing regulatory opposition for its proposed plan to buy T-Mobile USA.

Both Verizon Wireless and AT&T, the No. 1 and No. 2 U.S. mobile providers, are trying to improve their network capacity to support increased consumer demand for services such as mobile web browsing on devices like tablet computers.

Analysts said it made sense for Verizon to take the chance to get a deal done while AT&T is tied up with efforts to seek approval for its T-Mobile USA deal but some wondered why the cable operators did not wait.

“It looks like a great deal for Verizon,” said Pacific Crest analyst Steve Clement. “You’d think from the cable guys’ perspective if you wait a little longer there’s more bidders — potentially AT&T and maybe T-Mobile USA.”

Comcast said, however, that the deal represented a 64 percent premium over the $2.2 billion price the cable consortium paid in 2006 for the wireless spectrum being sold to Verizon Wireless.

Another analyst saw the development of a reseller deal with Verizon Wireless as a strategy about-face for the cable operators, which compete with Verizon and AT&T in home telephone, Internet and television services.

“The biggest surprise is that it aligns the cable companies with Verizon, one of their fiercest competitors,” said Mizuho analyst Michael Nelson. “The primary reason the cable companies formed this consortium and acquired this spectrum was to compete better with Verizon and AT&T.”

The cable operators already resell wireless services in some markets using the network of Clearwire Corp, their venture with No. 3 U.S. mobile service Sprint Nextel.

Verizon results rise; estimates for new subscribers miss mark

NEW YORK ― Verizon Communications Inc. wireless subscriber growth was slower than expected in the quarter before the latest Apple Inc. iPhone launch but it was still well ahead of its biggest rival.

Verizon Wireless, its mobile venture with Vodafone Group Plc., added 882,000 subscribers in the quarter compared with the average analyst expectation for 1.04 million from eight analysts contacted by Reuters.

But considering that the No. 1 U.S. mobile provider’s biggest rival AT&T Inc reported less than half as many subscribers the day before, Stifel Nicolaus analyst Chris King said it was hard to find fault with the Verizon number.

“It’s difficult to complain about (subscribers),” he said. “It’s going to be so much better than everybody else’s. They’re still continuing to take market share.”

Verizon’s profit rose to $1.38 billion, or 49 cents per share, from $659 million, or 23 cents per share, in the year-earlier quarter, the company said on Friday.

Excluding items, Verizon earned 56 cents per share, which compared with Wall Street expectations for 55 cents.

Revenue rose to $27.9 billion from $26.5 billion and was slightly ahead of analyst estimates of $27.88 billion, according to Thomson Reuters I/B/E/S.

Verizon also repeated its previous expectation for 2011 earnings per share growth of 5 percent to 8 percent from $2.08 in 2010 and revenue growth of 4 percent to 8 percent.

Chief Executive Lowell McAdam noted that the company kept its targets despite storm-related network problems in August that followed a two-week labor strike.

“We faced significant challenges in recent months, yet delivered results that keep us on track to meet our 2011 earnings and revenue guidance, with great momentum expected entering 2012,” he said in a statement.

Verizon shares were down 10 cents at $37 in premarket trading.