Reuters Analysis: Tax strategy may be key to Verizon Wireless deal
More broadly, though, Vodafone could face a political backlash in the UK from any deal that was clearly structured to avoid taxation, said Robin Bienenstock, senior analyst at Bernstein Research.
U.S. companies such as Starbucks, Amazon and Google have come under fire from British lawmakers for using legal maneuvers to cut their tax bills in the UK.
"The problem with tax is not just the technical ability to avoid it, but the scorched earth that trying to avoid it could leave with the UK government afterwards," said Bienenstock. "Recent tax cases in the UK ... suggest that an attempt to avoid tax on such a large and high profile deal would be very badly received."
While I agree that a full takeover makes sense to VOD, I don't think it does to VZ. We'll see of T gets involved, but I doubt it. Therefore I think it is less likely a full takeover happens. And since VZ will not offer enough for VZW for VOD to accept, I doubt any deal happens. But as long as the investment bankers and hedge fund managers hype a deal, the stock should do well.