Verizon has made a $100 billion bid for Verizon Wireless from its joint venture partner Vodafone. The bid is for a stake in Verizon Wireless and is very likely to be carried out after the preliminary procedures.
The famous company, Verizon already has a 55% share in Verizon Wireless. But now it is sure to go up to 100% with the rumors of a new bid of $100 billion for full ownership. Bankers and lawyers have been contacted for the sake of this takeover or merger. While the soft school will go into action as Verizon tries to coax Vodafone into selling its shares, if it doesn’t work a more hard school methodology will have to be used. What this means is that the bid will be taken into the outer world where an auction will decide the fate of Verizon Wireless.
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On the other hand, Vodafone is taciturn on this matter. It is unclear whether it wants to sell its shares or keep them intact. In the capacity of #1 US wireless firm, Verizon has openly declared that it wants to buy out its British counterpart Vodafone. According to Reuters, Verizon has been assertive in its pronouncement. Already it has made preparations to stockpile $50 billion in order to make the payment on the desired deal. The rest will be made later on from its own personal funds. The news was leaked by people who declined to give their names since the whole deal is still in its embryonic phase.
The administration at Vodafone and Verizon Wireless refused to comment on this matter. Vodafone has basically teetered on the edge of selling or not selling its shares. The new CEO, Vittorio Colao has been making efforts to supercharge the organization by making it smarter, sleeker and smaller. This may mean that by selling its shares the money obtained could be used for other purposes. Among these are the return of profits to the stakeholders and the buying of fixed line assets. As for Verizon it would gain greater agility via engulfing Verizon Wireless.
$100 billion is the most probable beginner’s bargain that Vodafone will strike with Verizon. It is high time both parties honestly face the writing on the wall and give and take what is due. Nine years back the two almost made a deal. Now a second opportunity has knocked on their doors. It would be best if they both availed it. Verizon won’t face much hindrance in raising the necessary amount of money for a takeover. What we have to see is whether Vodafone swallows the bait.