Wouldn't $130B for 45% of VZ imply a VZ market cap of $290B vs $135B (for VZ at $47/share)? A premium of about 50% ($65B/$135B)? If Vodafone's exit is really worth that much, then S, T, and others are dirt cheap. I don't get the math here. What is going on?
Unless I don't understand the math or the way the deal is written, (which I very possibly do not), then my calculation is that they are valuing verizon stock at $55.53, which seems about right to me. So I'm hoping that this means that the stock will be at that level very soon. I got in at $47.45 a few weeks ago and my target was $55-60/share and I was assuming that it would reach this level by the end of September after the new iphone is released. Either way I'm not a big investor so redardless of which direction it goes I don't have that much exposure.
It is 45% of VZW ($289B for all of VZW) that is being valued at $130B in the deal, not VZ which has a $184B enterprise value and owns 55% of VZW. So VZ, sans VZW has an enterprise value of $25B ($184B - .55*289), and after acquiring VZW will have an enterprise value of $314 ($25B+$289B), and with $112B in debt ($47B current net debt plus $65B in new debt), will have a market cap of $202B post the transaction. But the $65B increase in market cap is purely due to the increase in shares issues and not due to a price per share increase, the later would only be if one thought the reduction in dividends paid to VOD would be greater than the increase in interest costs and dividends paid to the additional VZ sharehoders.