Verizon is considering a $100bn cash and stock bid for Vodafone's minority stake in their US mobile operation as pressure from the US mounts to negotiate a deal.
Two people with knowledge of the US telecom group's thinking said it had made no offer and had not formally retained advisers. However, it had been working on a possible bid that would value the 45 per cent per cent stake in Verizon Wireless at about $100bn, excluding tax paid on the sale.
The offer would be structured to maximise the amount of cash available via hot debt markets, where the average price of lending has fallen to record lows in recent years.
One of the people familiar with the situation said the offer would be split evenly in cash and stock based on an assumption that the US group could raise up to $50bn in cash.
The US group can also lean on the strong free cash flows generated by the stake in the business to cover the debt interest payments and dividends for the new shareholders.
Verizon has been seeking to increase pressure on Vodafone to secure a deal sooner rather than later, reiterating its interest publicly and ruling out tax liabilities, given the view that debt and currency markets have rarely been as supportive for a deal. Verizon declined to comment.
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