A number of major investors believe that if Vodafone reduces its assets by selling off its stake in Verizon Wireless, the bid needs to be worth more than $100 billion.
Six major investors in the U.K. carrier consider a $100 billion bid for the Vodafone's 45 percent stake in its U.S. joint venture with Verizon Communications far off the mark, according to Reuters. Following reports that a potential takeover bid would be worth $100 billion -- in equal amounts of cash and stock -- investing parties contacted the publication, stating that an offer should be made in the region of at least $120 - 135 billion.
The shareholders, who own approximately 1.3 billion Vodafone shares between them, would prefer that the British group pushes for a full merger with Verizon if the takeover bid stands., Verizon denied rumors that a deal would be worth $245 billion at a 40 percent premium on Vodafone shares, offered jointly by the firm and AT&T. Original reports suggested that once Verizon had purchased the 45 percent stake in the U.K. carrier, the company would take over U.S. operations, whereas European business would be controlled by AT&T.
Verizon said it would be a "willing purchaser" of the stake, but had no current intentions to merge or make an offer to Vodafone.
Investors worry that if Vodafone lets go of its Verizon stake, the carrier's asset portfolio will be severely damaged, and may also affect share prices as the company's European market issues will be brought to the forefront. Ralph Brook-Fox, U.K. equities fund manager at Ignis Asset Management -- a shareholder in Vodafone -- told the publication:
"Without wishing to be too disrespectful, (Vodafone is) sitting with a rather ugly set of assets once you lose the Verizon Wireless stake. I think the merger or full takeover scenario, although not at the forefront of discussions right now, could actually end up being the more palatable deal."
Although Vodafone has been hit hard in European markets struggling with volatile economic conditions and fierce competition, the carrier recently expanded its 4G coverage to. In addition, the British firm has began rolling out the in New Zealand.