Despite ongoing rumors that suggested Verizon Communications Inc. (VZ) and AT&T (T) would enter a joint bid to acquire Vodafone (VOD), Verizon said on Wednesday that it has no plans to merge with or acquire the British telecom giant.
However, Verizon has not ruled out its interest in buying out Vodafone’s 45% in Verizon Wireless.
“As Verizon has said many times, it would be a willing purchaser of the 45 percent stake that Vodafone holds in Verizon Wireless,” Verizon 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.”
The problem with the potential buyout is that it would probably leave Vodafone with a $20 billion tax bill. Vodafone’s management and shareholders would need to come to some agreement about a possible deal in the future.
Recently there had been rumors that Verizon and AT&T would come together to purchase Vodafone’s assets. Verizon would acquire Vodafone’s US operations and AT&T would take over the company’s non-US assets. But Verizon’s statement on Wednesday makes this seem like an unlikely scenario.
Verizon shares were down 20 cents, or -0.40%, during pre-market trading on Wednesday. The stock is up +14.4% year-to-date.
The Bottom Line
Shares of Verizon (VZ) have a dividend yield of 4.16% based on last night’s closing price of $49.50 and the company’s annualized dividend payout of $2.06 per share.
Verizon Communications Inc. (VZ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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