It looks as if the long discussed buyout of Vodafone’s 45% minority stake in Verizon Wireless may be back on the front burner. Yesterday, CEO Lowell McAdam went as far as to tell the Wall Street Journal that such a deal is currently “feasible” and that they would still love to own the whole business. He also said that Verizon’s growing wireline strength was making it easier to put together such a deal.
Vodafone has resisted Verizon’s hints in the past, and some have seen the disagreements over dividend payments to be a direct result of that tension. But Vodafone also has been sounding somewhat more cooperative lately, recently declining to rule out a US exit. Of course, everyone has their price and public companies especially so, but most analysts still think the two remain far apart. But I think that perhaps the likelihood of a deal is growing.
With the C&W Worldwide purchase and their aggressive plans to integrate those fiber assets more deeply into their other holdings, especially in the UK, Vodafone increasingly has other fish to fry. I think it’s entirely possible that Vodafone could decide to build on the C&W Worldwide acquisition by adding more backhaul fiber to their diet both organically and inorganically. That would give their various wireless businesses more control over their cost structures at a time when wireless data is booming and not likely to stop accelerating anytime soon.
The proceeds of a sale of their stake in Verizon Wireless would give Vodafone a war chest with which to pursue other assets at a time when prices in Europe in particular remain depressed. It could simply be an opportunity to sell high to buy low. And a the proceeds of a 45% stake in Verizon Wireless would go a long way in that market.