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It’s hard to keep up with the fast paced Spy-vs-Spy world of Internet financial journalism, and the Verizon – Vodafone drama is no less dynamic.  But it seems like Verizon is going to acquire the 45% share of Verizon Wireless for a $120B deal of stock and cash(debt). 

 

The most interesting part of this is the implied value that Verizon places on its share, and on the markets valuation of Verizon Communications.  If Verizon Communications wireline is really worth $4B, then the premium to Vodafone comes to about $15B – and seems reasonable enough to make the deal happen. In other words, the value of Vodafone's share of Verizon Wireless might be $105B.

Here’s the math:

Verizon Wireless 45% $120B
Verizon Wireless 55% $147B
Verizon Wireless 100% $267B
Verizon Market Cap
$136B
VZ-VzW(55%) = $136B -  $147B = ($11B)

 

So it looks like a reasonably fair deal.  Maybe with this out of the way, Verizon Executives will find something to do with the wireline business.

 

 

 

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