AT&T To Explore Vodafone Takeover As Soon As Next Year: Bloomberg

(RTTNews) - Telecommunications giant AT&T Inc. (T) is laying the groundwork internally for a potential takeover of British telecom giant Vodafone Group Plc. (VOD, VOD.L), next year, though the companies haven't entered formal negotiations, Bloomberg reported, citing people familiar with the matter.

The U.S. phone company is intensifying work on which Vodafone assets it would retain after a deal and who could buy others, the report said citing the people.

AT&T reportedly remains interested in U.K. carrier EE as an alternative target. It is also formulating a strategy for Vodafone's operations in Europe.

AT&T approached Verizon Communications Inc. (VZ) this year about a transaction in which AT&T would buy Vodafone's European operations, with Verizon taking over their wireless joint-venture and America Movil SAB taking much of the rest, the report said quoting two of the people said.

Verizon reportedly rejected that approach as too complex and likely to slow its own $130 billion purchase of Vodafone's 45 percent stake in Verizon Wireless.

In early September, Verizon Communications had said that it agreed to buy British mobile phone company Vodafone Group Plc.'s 45% stake in their Verizon Wireless joint venture in a $130 billion cash and stock deal that gives it full control of the largest and most profitable U.S. mobile phone carrier.

Under the terms of the deal, Verizon would pay Vodafone $58.9 billion in cash, financed with credit from J.P. Morgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc., Bank of America, N.A. and Barclays. The company also will issue $60.2 billion in stock to Vodafone shareholders.

In addition, Verizon would issue $5.0 billion in notes payable to Vodafone, and would sell its 23.1% minority stake in Vodafone Omnitel N.V. to Vodafone for $3.5 billion. The remaining $2.5 billion of the deal value will be a combination of other consideration.