Vodafone share values fell after Verizon Communications denied rumors of a takeover of its joint venture. This recent development indicates the inability of the two telecommunications conglomerates to formalize a deal over Verizon Wireless.
Shares for Vodafone rose by as much as 25% this year in each story that it would be selling off its 45% shareholdings in Verizon Wireless. The cost of the transfer would be US$115 billion but the main issue would be a US$20 billion tax bill for Vodafone should the sale push through.
Many analysts say that it is best that a merger push through between the two telcos. Unfortunately, the recent announcement that Verizon would not undertake the takeover drove share values of Vodafone by 3.6%.
Verizon formally responded to the FT Alphaville blog saying that the two venture partners have held regular senior level discussions on options available for both parties. The status quo though has left Vodafone holding a minority stake in its greatest asset while Verizon cannot fully own a business it has long wanted to operate.
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