If Verizon Communications buys out U.K. partner Vodafone's stake in Verizon Wireless, cross-ownership in both stocks by large institutional investors could smooth the path to a deal.
Shareholders in both Verizon and Vodafone include BlackRock , U.K.-based Legal & General Investment Management, Norges Bank Investment Management, Capital Research, State Street , and the Vanguard Group — according to data provided to IBD by Thomson One Analytics.
BlackRock Advisors is the biggest shareholder in London-listed shares of Vodafone, according to Thomson One. Blackrock Institutional Trust Co., BlackRock Financial Management and BlackRock Investment Management all own big chunks of Verizon.
Verizon Communications owns 55% of Verizon Wireless, Vodafone the
rest. Analysts have estimated the value of Vodafone's stake at $100
billion to $135 billion. Technically, a shareholder vote wouldn't be
required in a buyout of Vodafone's stake, but no doubt shareholder
approval would be greatly desired by the companies.
Verizon's stock as well as NY-listed shares of Vodafone are both up a fraction in
the stock market today, continuing to rise amid speculation over a deal.
Some analysts have said a deal that would give Verizon Communications full ownership of the wireless business may already be
priced into its stock.
Verizon's chief financial officer recently said tax hurdles to a deal could be overcome,
as IBD reported.
One way Vodafone could avoid a big capital gains tax in the U.S. would be to restructure the joint venture, with Vodafone exchanging its shares of Verizon Wireless for shares of Verizon Communications.
At Macquarie Capital, analyst Kevin Smithen says if a deal is announced, the stock reaction might be mixed.
"Many investors on both sides of the Atlantic own both Verizon and Vodafone for a trade. Even with a (possible) joint listing in London, we see huge cross-ownership creating selling pressure and feel that Verizon might not go up on the deal," he said in a report.
source: news.investors.com
