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Daily Digit: $130 bln for Verizon Wireless

Monday, May 06, 2013 - 01:25

May 6 - Some Verizon investors OK with paying up to $130 billion for Vodafone stake in Verizon Wireless. Bobbi Rebell reports.

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Your Daily Digit today is $130 billion. Two large shareholders of Verizon Communications tell Reuters they would be happy for the company to pay up to $130 billion for Vodafone's stake in their wireless venture- that's as much as 30% higher than the $100 billion cash and stock bid Verizon has been preparing. Here's why they may feel its worth the extra dough: Verizon Wireless is the No. 1 U.S. mobile service provider. It generates more than sixty percent of Verizon's revenue- and almost all of its profit. And the deal could boost the profit even more because Verizon wouldn't have to share the money from the wireless unit. And it all could happen with no new expenses, because Verizon already runs everything. They also probably need to pay more if they want to get a deal done: Several Vodafone investors have said Verizon's current $100 billion cash-and-stock bid for the 45 percent stake is "inadequate". But even at $100 billion- the deal would be the third largest deal on record. But regardless of what these large shareholders want- Verizon isn't budging for now. And Chief Executive Lowell McAdam told analysts just this week that he did not believe a premium would be needed to buy the stake, and warned Vodafone of a "lean" year for dividend payments from their wireless venture.

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Daily Digit: $130 bln for Verizon Wireless

Monday, May 06, 2013 - 01:25