Vodafone Shares Slip As Verizon Denies Deal

Verizon Communications has denied speculation that it was preparing to bid for Vodafone - either alone or with others.

It comes after speculation that the US telecommunications company would pair-up with its biggest rival AT&T to buy out the British mobile phone giant.

Vodafone's shares fell following the denial - after rising to a 10-year high on Tuesday amid rumours of the deal.

But Verizon did reiterate that it was still interested in purchasing Vodafone's share of their wireless US venture.

"As Verizon has said many times, it would be a willing purchaser of the 45% stake that Vodafone holds in Verizon Wireless," the company said in a statement.

"It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others."

Vodafone shares have risen by almost 20% since January

Early trading saw Vodafone's shares drop by almost 3% before easing to just under 2% down by midday.

Verizon owns the 55% of Verizon Wireless that Vodafone doesn't and has been openly interested for years in buying out its partner.

Speculation about a deal between Vodafone and Verizon has been circling since January when the British company began exploring what to do with its US asset, which makes up about 75% of its value.

But media reports claimed a huge tax bill faced by Vodafone had held the deal back.

City AM said the British company would be left with a levy equal to the rate of corporation tax on the capital gains it has made since starting the venture if it sold its stake.

The newspaper said analysts have valued the stake at up to £100bn, which could result in a tax bill of around £20bn.

A deal that included AT&T could prove more tax efficient; with Verizon taking Vodafone's US assets, and AT&T buying the rest.

But other analysts said that although it made sense for Verizon to purchase the rest of its wireless venture, it would be risky for AT&T to take on Vodafone's foreign assets.

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