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BofA Believes AT&T Could Help Verizon Buy Vodafone, Lifts Target on Verizon to $50

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BofA Merrill analyst David Barden suggested AT&T (NYSE: T) could buy Vodafone's (NASDAQ: VOD) non-U.S. assets, effectively opening the door for Verizon (NYSE: VZ) to buy Vodafone.

As Verizon is not interested in all Vodafone assets, it's unlikely a deal for all of Vodafone would be done, according to Barden. AT&T has the ability to buy Vodafone's non-U.S. business for around $70 billion, sweetening the picture for Verizon.

Barden called any potential three-way deal likely to be “time consuming.” This would allow Verizon to get full control of Verizon Wireless (VOD owns 45 percent), while Vodafone gets a premium for the portfolio and AT&T gets “global scale” (potentially accretive to cash flow).

Shares of Verizon remain Neutral at BofA; the firm's price target rose from $45 to $50.

Verizon shares are at $47.95, down 1.09 percent in midday trading. Shares of Vodafone are at $27.78, down 0.07 percent.

Latest Ratings for T

DateFirmActionFromTo
Jul 2014JP MorganMaintainsNeutral
May 2014BernsteinInitiates Coverage onMarket Perform
May 2014Credit SuisseMaintainsOutperform

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