Shares of U.K. telecom firm Vodafone (London Stock Exchange: VOD-GB) surged 9 percent on Thursday after it confirmed discussions with Verizon Communications (VZ) over its 45 percent stake in their U.S. joint venture Verizon Wireless.
The company noted that there had been increased media speculation regarding the deal. However, the firm said that there was no certainty that an agreement would be reached.
Joe Rundle, head of trading at ETX Capital, said Vodafone's Verizon Wireless stake could be offloaded in a "staggering" deal worth nearly $130 billion.
"Very welcome news for Vodafone - this disposal was an overhang in the stock price for some time given the speculation around this, and more importantly, it allows the group to pay down its debt," Rundle said in a morning note.
According to him, if Verizon (VZ) buys the entire stake, it could save Vodafone from paying as much as $35 billion in taxes.
"Vodafone's market cap today jumped up to around $152 billion in USD terms so a disposal around $130 billion is a transformational, fortune-changing deal which is likely to see Vodafone become the new darling of the telecom sector," Rundle added.
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