News hit yesterday when the CEO of Verizon said in an interview, “we have always said we would love to own all of that asset.” Currently, Verizon Wireless is 55% owned by Verizon and 45% by Vodafone. The partnership was formed back in 2000 when cell phones were just scratching surface, this allowed both companies to pool assets and share costs, cutting the risk in half. As time has progressed its amazing how large cell phone providers have become, and this is now making the partnership awkward as the business is taking the lead role in growth for the telecommunication companies.
The CEO of Verizon also said “I think (a deal) is feasible.” “Our wire line business is getting stronger and as that gets stronger, it makes it easier.” He believes that Verizon could buy the strake from Vodafone outright, but he noted there are “lots of different ways he could do it.”
Recently, Vodafone has been taking a beating from Europe as it contributes to around three quarters of its revenue. As Verizon Wireless is focused in the U.S. and has been thriving for years now. Its quite obvious what company is showing more strength as the partnership goes on…
Investors are very aware of this on-going conversation, and it seems as though they have come to a conclusion on what’s going to happen….customers are buying up Jan 26, Feb 26, Feb 27 and Feb 28 calls on Vodafone (VOD). Hint hint….Vodafone is getting taken over.
The fundamentals look positioned correctly for a takeover of Vodafone and the huge buying coming into it makes the case that much stronger. As nothing is a ‘lock’ in this business….I think its fair to say that Verizon is going to make a strong push at Vodafone in the near future, and the ‘smart’ money is leaning that way as well.
Author: Peter Nitso
Twitter: @PeterNitso