8/29/13

http://www.bloomberg.com/news/2013-08-29/verizon-s...

Deal could happen as soon as the 2nd. The amount of capital Vodafone would exit with is incredible.

Also, some nice IB fees for this.

Comments (19)

8/29/13

Who's on the mandate and what would the fees be for this deal.

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8/29/13

Looks like a lot of peoples' Labor Day Weekends are getting ruined.

Calm down.

8/29/13

As a VOD share owner, I'm LOVING this

8/29/13

Reuters reports that Verizon Wireless had FCF of $28.6 billion in 2012. Since Verizon is buying the 45% stake that means they are basically buying $12.85 billion of FCF a year (I dont know what the growth possibilities are) for 130 billion. To me that seems fairly priced at about 10 times FCF. Any telecom experts here that have an opinion regarding the 130 billion valuation?

In reply to MandAisOkay
8/29/13

Now please correct me if I am wrong. Because verizon has ridiculous amounts of D&A isnt a valuation using a multiple of FCF kind of not as relevant as looking at EBIT multiples or other ways of looking at a company including D&A?

8/31/13

"Bank of America Merrill Lynch and Morgan Stanley are among those working on providing the vast debt package to finance the cash portion of the deal for Verizon. Goldman Sachs and UBS are advising Vodafone"
Source: FT

8/31/13

the amount of fees the Ibanks involved in this deal are going to bank will be amazing ;)

8/31/13

Interestingly enough, I have a tiny bit of experience with telecom valuation and the figure I've seen was 10x EBITDA-Capex, not FCF.

8/31/13

Good for vod retarded for vz

8/31/13

Reuters: "Verizon has tapped JPMorgan Chase & Co, Morgan Stanley, Barclays, and Bank of America Merrill Lynch to help raise the financing through a mix of bonds and bank loans, the sources said.

It plans to pay for another half of the purchase with its own stock.

The four banks are also advising Verizon, along with former Morgan Stanley banker Paul Taubman and Guggenheim Partners, the sources said."

In reply to leveredarb
8/31/13

leveredarb:

Good for vod retarded for vz

Really interested if you could go into more detail.

8/31/13

Heres the breakdown:

Guggenheim Securities & ex-MS Taubman advising Verizon (rumor is they've been on it for over a year or more)
JPM, MS, Barclays, BAML on financing, and also co-advisors for Verizon (rumor is they came a bit later for financing reasons and now co-advising the closing)
GS and UBS advising Vodafone

In reply to GED or Bust
9/1/13

GED or Bust:

leveredarb:

Good for vod retarded for vz

Really interested if you could go into more detail.


Vz will do a deal at peak Valuation and leverage up just before wireless industry becomes a lot more competitive. They will significantly overpay and hence destroy shareholder value. Unlike what the sell side And a lot of us Investors seem to believe leverage driven eps accretion doesn't add value, just lever up at hold co level if you have to.
In reply to leveredarb
9/1/13

Definitely agree with this. I think it's an incredible premium for the business and particularly because they seem to be desperate to split off from vodafone.

However, on the vod sign - pretty interesting article regarding what it is viewed with how they use the money.
http://www.reuters.com/article/2013/08/30/us-vodaf...

9/1/13

Ideally you just sell it to AT&T, they are also ex growth and very happy to destroy value through European acquisitions

9/1/13

Holy shit is Taubman going to get paid

9/1/13

Straight from WSJ article: "Verizon is being advised by Guggenheim Partners LLC and former Morgan Stanley banker and executive Paul Taubman, while UBS AG and Goldman Sachs Group Inc. are advising Vodafone, people familiar with the matter said. J.P. Morgan Chase & Co. is leading the debt-funding package for the deal, with Bank of America Corp., Morgan Stanley and Barclays PLC also contributing, one person said"

Advisors are Guggenheim Securities, Taubman
Financing by JPM, Baml, MS, Barcap

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG

In reply to leveredarb
9/1/13

leveredarb:

GED or Bust:
leveredarb:

Good for vod retarded for vz

Really interested if you could go into more detail.

Vz will do a deal at peak Valuation and leverage up just before wireless industry becomes a lot more competitive. They will significantly overpay and hence destroy shareholder value. Unlike what the sell side And a lot of us Investors seem to believe leverage driven eps accretion doesn't add value, just lever up at hold co level if you have to.


Thanks +1
9/2/13

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