VZ is paying VOD $130B. That implies that the market values the rest of VOD at about $26B. VOD current mkt cap is $156 B. VOD net income was about $680 million. That makes its PE over 30. Why is VOD minus VZ wireless worth a PE of 30 or greater?
VOD projects about $8 billion in cash flow after the transaction closes. So if you value that at 10X, that's about $80 billion, or $16.30 per current ADR. Probably 12X is a better number--$96 billion--since it will have a great balance sheet and better growth, so that's about $19-20. A takeover from T might push that to $22 or so, closer to 14X cash flow, but it's hard to see why T would pay more than that, considering VZW is only being sold for 9.4X cash flow, but that's giving credit for the superior state of VOD's post-transaction balance sheet.