Verizon and Vodafone agree on $130B buyout
0. phoneArena 01 Sep 2013, 14:06 posted on
There have been rumblings for a few days now that Verizon and Vodafone have been getting closer to a deal which would have Verizon buying out Vodafone's 45% stake in Verizon Wireless. As of yesterday, we knew that today would hold a vote on the matter; and, The Wall Street Journal is now reporting that the deal has been agreed to by negotiators for both sides...
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1. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)
Windfall for Vodafone, but maybe they should declare a liquidating dividend and go out of business? Vodafone's other ops aren't exactly financially compelling.
2. milesboy5 (Posts: 175; Member since: 07 Nov 2012)
I mean they now have 130B dollars to invest in their other ops.
9. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)
What makes you think they will be any better at investing their pile of cash than they were at operating their non-VZW units?
4. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
You need to do the math: 45% of the WIRELESS business for say $130 billion.
130 billion / 0.45 = about $288.9 billion.
The actual value of the entire wireless business is more since minority shareholders get less than full value. Or said differently, had Vodafone tried to buy the Verion Wireless' 55% majority ownership, the entire value would exceed the $290 billion bogey.
We know this to be true (e.g. minority shareholders get a discount to fair value) because the average premium is about 30% paid to minority shareholders during corporate takeovers on publicly traded stocks. That is to say, had the minority shares been correctly priced, the 30% premium shouldn't occur. Logic dictates because of the acquistion premium, the existing price prior to the acquistion must reflect the minority discount. The catch is the acquisition price my be less than fair value.
Short answer -- the Wireless business is worth say $290 billion since Verizon is acquiring the minority shareholder, BUT SINCE Verizon has other assets (it has landlines, etc), then Verizon is worth way more than $290 billion.
7. tedkord (Posts: 9671; Member since: 17 Jun 2009)
I did the math. That's how I arrived at over $260 billion.
8. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
If $130B / 0.45 equals over $260B is the best you can do, then you need to work on your math skills.
This isn't differential calculus, it's basic long division.
13. scumbledEGG (unregistered)
he said its OVER 260b, haha! he's right!!! he didn't say exactly 288.9b... rounding 260 is 300??? rounding 288.9 is 300??? "estimated math" = "common sense" haha! "DON'T GIVE ADVICE UNLESS YOU'RE ASKED"
12. Leo_MC (Posts: 885; Member since: 02 Dec 2011)
Usually the shareholders get more than their shares value.
At this rate, VW will get back WC money in 60-70 years.
5. zachattack (Posts: 621; Member since: 31 Jul 2013)
1. wtf is Vodafone and 2. holy s**t that's a lot of F****** money
6. Blazers (Posts: 414; Member since: 05 Dec 2011)
I could be wrong, but I believe Vodafone is an old wooden ship that was used during the civil war era......
10. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)
Might as well be an old wooden ship for all they accomplished separate from VZW.