Verizon unlikely to bid now for Sprint

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Taken out of USAToday


Verizon unlikely to bid now for Sprint, sources say
By Jessica Hall, Reuters
PHILADELPHIA - Verizon Communications has no imminent plans to bid for
Sprint, people familiar with the situation said Tuesday, lifting a potential
obstacle to Sprint's bid for Nextel Communications.
Separately, Britain's Vodafone Group (VOD) denied it was in talks with
Verizon (VZ), its wireless joint venture partner, about any offer for Sprint
(FON).

The two developments appeared to contradict a report earlier Tuesday by The
Wall Street Journal, which said Verizon had received the backing of Vodafone
to make a bid for Sprint in a move that could thwart Sprint's $35 billion
bid for Nextel (NXTL).

A deal between Sprint and Nextel is expected to be announced Wednesday,
sources familiar with that deal said.

Verizon has no plans to thwart that deal with a rival bid, people familiar
with the matter said.

Verizon declined to comment. Sprint and Nextel could not immediately be
reached for comment.

"You'd have to be foolish to be betting on Verizon jumping in this week with
a splashy bid. It's just not the read anyone is getting," said a trader who
specializes in takeover stocks.

Verizon has studied Sprint and weighed its options, but the regulatory
hurdles and expected complications of spinning off overlapping assets would
make the deal onerous and time-consuming, people familiar with the matter
said.

"We believe a Verizon/Sprint deal would face significantly greater
regulatory scrutiny than a Sprint/Nextel deal, given Verizon Wireless' size
and the FCC's concern about wireless market power coming under greater (Baby
Bell) control," said Prudential Securities analyst Christopher Larsen.

New York-based Verizon is "worth keeping an eye on but there's a lot of
pieces that need to fall into place perfectly for it to happen," a source
said.

Verizon would be better off buying wireless spectrum at a Federal
Communications Commission auction in January rather than dealing with the
hassles and costs of buying Sprint, a second trader said.

That auction will feature 242 wireless licenses covering key markets like
Los Angeles and Orlando and will likely attract bidders such as Verizon
Wireless, the venture between Verizon and Vodafone, and its competitors.

Verizon, of course, could change is strategy and make a move for Sprint,
sources said. If that were the case, it would need the consent from its
British partner before rolling Sprint's wireless phone assets into their
Verizon Wireless joint venture.

"If they do decide to go after it, they will come and talk to Vodafone," a
source said.

Vodafone, the world's largest wireless telephone company, also said it had
no plans to launch its own bid for either Sprint or Nextel, the No. 3 and
No. 5. U.S. wireless telephone companies, respectively.

Such a move would have marked Vodafone's second takeover attempt this year
in the U.S. wireless market. In February it made a controversial, and
ultimately failed, bid for AT&T Wireless.

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