Vodafone Affirms Talks With Verizon For Disposal Of Verizon Wireless JV Stake

(RTTNews) - Responding to the recent press speculation, British telecom giant Vodafone Group Plc. (VOD, VOD.L) confirmed Thursday that it is in talks with US Telecommunications giant Verizon Communications Inc. (VZ) regarding a possible disposal of Vodafone's 45 percent stake in their joint venture Verizon Wireless. There is no certainty that an agreement will be reached, Vodafone said.

Verizon Wireless, the largest U.S. cellphone carrier, is the US wireless joint venture between Verizon Communications and Vodafone, with Verizon owning a 55 percent stake and Vodafone owning a 45 percent interest. The joint venture began operations as Verizon Wireless on April 4, 2000.

On Wednesday, the Wall Street Journal reported that Verizon has renewed talks to buyout Vodafone's stake in their joint venture. The purchase of the stake could reportedly cost Verizon well over $100 billion.

Verizon has been contemplating the buyout of the stake several times in the past decade, but pricing has been the biggest stumbling block along with the risk of raking up a huge tax bill nearing $10 billion.

As per reports, talks failed earlier this year when Verizon was looking to pay about $100 billion for the stake, while Vodafone was expecting in excess of $130 billion. Since July, the discussions have accelerated due to the rising interest rates and growing competition in the U.S. wireless market, the report said.

Verizon is said to be in talks with banks on possibly borrowing $50 billion or more to cover the cash component.

Meanwhile, several reports in April speculated that Verizon was working with its U.S. rival AT&T, Inc. (T) on a potential bid for Vodafone. However, Verizon immediately denied any such move, stating that it does not have any intention to merge with or make an offer for Vodafone whether alone or in conjunction with others. But, the company then reiterated that it would be a willing purchaser of Vodafone's stake in their joint venture.

Vodafone Chairman Gerard Kleisterlee also reportedly said last month that he would seriously consider any offer for its stake in Verizon Wireless if it offered more value to investors than the current status quo.

In London, Vodafone shares are currently trading at 204.68 pence, up 15.38 pence or 8.12 percent. In the pre-market activity on the Nasdaq, Vodafone shares were gaining $2.30 or 7.82 percent, and trading at $31.71.

In pre-market activity on the NYSE, Verizon shares are currently trading at $48.15, up $1.59 or 3.41 percent.