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Verizon IPO still on tap
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February 6, 2001: 4:44 p.m. ET
Verizon dismisses reports of delay; is eyeing market conditions in March
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NEW YORK (CNNfn) - Verizon Wireless, the largest U.S. wireless-phone service provider, still plans to go public before the end of this year, a company spokesman told CNNfn.com.
Verizon Wireless has no plans to postpone its IPO and declined to comment on reports that its joint venture partner, Vodafone, would seek to delay the public offering.
"We announced that we would delay the IPO until early this year and we're sticking to that," company spokesman Jim Gerace said. "We plan to complete the IPO this year."
Because of quiet period rules associated with the offering, Verizon could offer no further information. Gerace would not set a timetable for the offering and declined to comment on reports that Vodafone would boost its stake in Verizon Wireless and take control of the unit. Verizon Communications owns 55 percent of the wireless unit, while Vodafone owns 45 percent.
Vodafone last year pooled its U.S. cellular phone assets – held by its subsidiary Airtouch -- with those of Verizon Communications (VZ: Research, Estimates), which was formed out of Bell Atlantic Corp.'s purchase of GTE Corp. With some 27 million subscribers, Verizon is the biggest U.S. cellular phone service provider -- eclipsing AT&T Wireless and Sprint PCS.
Parent Verizon Communications said in a conference call last week that it would look at market conditions for the wireless IPO at the end of March, Gerace said.
Vodafone in cash offer?
Press reports said Tuesday that Vodafone, the British mobile phone company, which is neck-and-neck with Japan's NTT DoCoMo as the global industry leader, was set to postpone the planned flotation.
Vodafone spokeswoman Melissa Stimpson played down the report, saying, "We never put a deadline on (the flotation). We said we would review it when market conditions improved ... and they clearly haven't changed enough yet."
She refused to comment on whether Vodafone would be likely to buy the remainder of Verizon, saying the report was "speculation."
The press report, quoting a U.S. industry source, said Vodafone Chief Executive Chris Gent "almost certainly" approached his Verizon counterpart Charles Lee about taking control of Verizon Wireless.
In August, Verizon Wireless filed with the Securities and Exchange Commission for a $5 billion IPO. The offering, co-led by Goldman Sachs & Co. and Merrill Lynch & Co., was expected in September. However, in October, Verizon Wireless disclosed that it was delaying the sale due to market volatility.
 The only pressure on Verizon is to complete its IPO by Sept. 30 so that it can consummate its buy of Price Communications Wireless. In November, Verizon agreed to acquire Price for $1.5 billion in stock. The purchase price of the deal is based on offering price of Verizon shares in the IPO.
If Verizon does not complete the IPO by the September deadline, Price can walk away, Gerace said.
Analyst Pat Comack, of Guzman & Co., dismissed reports that Vodafone would buy Verizon Communications' stake. "Absolutely not," Guzman said. "If anything it would be the other way around."
A source at Verizon Wireless said the company would be unlikely to sell its stake since the joint venture was just formed in June.
Jim McCafferty, a telecom analyst with SG Securities in London, said a purchase of Verizon Wireless would make sense for Vodafone, which has an important footprint across Europe already.
"To take control, Vodafone would only have to buy about 10 percent (of Verizon Wireless) -- a smaller piece would be less cash consumptive," he said.
But Vodafone has little cash to play with, and McCafferty estimated the company's debt load at about £10 billion ($14 billion) as of the end of last year.
Outside of the September deadline, Verizon Wireless has no pressure on it to complete the IPO any time soon, Guzman said. "They are going to do it when they want to do it," he said. "They don't even have to IPO the thing."
Verizon Communications gained $1.90 to close at $54.40 Tuesday. 
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