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Vodafone Group Plc Message Board

  • k50cents k50cents Apr 25, 2013 11:23 PM Flag

    VOD = sell - hold - after VZ buys outstanding 45 % ? ?

    lots of news - lots of "smoke" - equals - some offers must be "on deck" - for VZ to get the 45 % that
    VOD has of VZ. - IT LOOKS LIKE - the game is being played on VOD's home field - they hold the ace's -
    and the stk. has been going up - up - up . my favorite - " Motely Fool" - isnt throwing enough light on this
    MEGA - MEGA deal in the works. WHAT TO DO - IF IT GOES THRU ?

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    • K50cents, the dynamics of arbitrage are interesting. You note that VOD has been going "up-up-up".
      You may want to go to the VOD chart and compare it with an overlay of VZ. For a month, a year, two years, etc.

      Talk about a stock going "up-up-up"... VZ is a rocket to the moon. Yes, arbitrage can be a (pardon the expression) "win/win." GLTA!

    • Post wireless sale to VZ, ATT comes in and buys VOD after distribute to us shareholders ...end of story!

    • I still say - VOD holds ALL the aces ! - = VOD why chop off an arm ? to get a finger ? profit wise ?
      that 45 % of VZ is the genie in the bottle. $100 B = a joke - get real if you want the 45 %..

    • "Without wishing to be too disrespectful, (Vodafone is) sitting with a rather ugly set of assets once you lose the Verizon Wireless stake," said Ralph Brook-Fox, UK equities fund manager at Ignis Asset Management, a top 40 institutional shareholder in Vodafone.

      "I think the merger or full takeover scenario, although not at the forefront of discussions right now, could actually end up being the more palatable deal."

      • 1 Reply to low_mac
      • Agreed low_Mac. There is no Good reason for VOD to sell their stake. It is a cash cow which is still growing as shown in VZ's last Q which will grow stronger as smart phone market matures. All the smart phone costs that were being eaten by carriers will slow (iPhones cost shares) will now be in VZ pockets as increased profits. By far the only plausible scenario is a complete takeover of VOD which I think could be done for 200 billion or $40 per share.

    • An article on PR Carbon just stated both sides have agreed the 45% stake is worth 130B. No formal offer yet. That was the bottom dollar on trailing value IMO. If VOD had looked on a forward basis then they need to add another 20-30B to THAT number to get a juicy reason to sell. Still, if you follow Einhorn's thesis that VOD's operations EXCLUDING VZ are worth +100B, there is 50B current value being placed on their VZ ownership. Fair market cap +230B but trading at 150B!!! We are talking near $47/share when it is trading at ~$30.50. Pfffffft.

      • 2 Replies to smalls_62
      • WSJ and others report VZ thinks VZW is worth $100B whereas VOD wants $130B. This values the 45% of VZW at between $222B and $289B. Now VZ and VOD are each currently valued around $150B for a total of $300B. This implies that the combined non-VZW value of VZ and VOD is only $78B to $11B!!!

        Of course, this makes sense because VZW is the bulk of VZ's earnings and its other operations aren't growing or don't make much money. At this point I don't know why VOD would take any overpriced VZ stock as payment for VZW. I don't see why VOD would sell its best asset, the one that's growing and generating hefty cash flow. If VOD sold VZW I don't see any alternative investments that compare favorably to VZW. If VOD sells VZW they'll get hit with taxes, they'll get stuck with VZ stock and the cash flow will get crushed. And if VOD pays a big special dividend with the proceeds, shareholders pay big taxes.

        My prediction: no deal happens any time soon.

      • $47 sounds pretty rich - I can see VOD asking a goodly premium as they sound like -
        they like things to stay like they are. VZ on the other hand is the hungry lion and wants
        the whole carcass. sitting on 3700.

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