March 13, 2006

Verizon Communications Inc. has reportedly offered to pony up $40 billion to acquire Vodafone Group’s 45 percent stake in Verizon Wireless.

European publication the Business first reported the news, citing a senior Verizon company official.

The publication added that Verizon is trying to figure out the magic number at which Vodafone’s chief executive officer, Arun Sarin, would be willing to sell the stake.

In the past, Verizon has repeatedly made it very clear that its interest in buying out Vodafone is to enable Verizon to have full control of its Wireless division.

Many industry analysts had expected the U.S. telecom company to make an offer as a response to last week’s announcement that AT&T Inc. was acquiring its partner in Cingular Wireless L.L.C. / BellSouth Corp.

Vodafone, meanwhile, is busy dealing with a dust-up over its corporate leadership as the company struggles financially.

Vodafone’s former chief executive, Christopher Gent, reportedly announced over the weekend that he plans to step down as honorary life president after media speculation that Gent was interfering with senior management at the company, the Wall Street Journal reported.

Gent, who retired from Vodafone in 2003, is now non-executive chairman of British pharmaceutical company GlaxoSmithKline plc.

Vodafone also announced last week that board member and chief marketing officer Peter Bamford plans to leave on April 1 as a result of a review of the operator’s marketing operations.

Board chairman Ian MacLaurin has said he would leave his post in July. These and other board departures within the past year have led to speculation of a clash between Vodafone’s old guard linked with Gent and a new guard associated with Sarin.

Some news outlets have reported a “whisper campaign” by former company officials against Sarin. Meanwhile, MacLaurin today released a statement declaring his support of Sarin.

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“I want to make it clear that I and the board are totally supportive of our chief executive, Arun Sarin, as he takes the company forward in changing and challenging times,” MacLaurin said.

“Any other suggestion is completely untrue.”

Vodafone’s stock has slumped in recent months, and the company confirmed last week that it is in talks with Internet company Softbank to sell its floundering Japanese operations.

Vodafone’s stock performance has prompted some shareholders to call for the company to sell either or both of its Japanese operations and its interest in Verizon Wireless.

Source: RCR