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Last Updated: Tuesday, 14 December, 2004, 18:26 GMT
Vodafone denies Verizon bid claim
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Sprint could become a target
Mobile phone giant Vodafone has denied it has given its backing to US partner Verizon for it to make a takeover bid of US telecoms and mobile firm Sprint.

Shares in the group closed 2.45% lower on the London market after the denial, recovering from a 4% fall earlier.

Investors had feared the group would become embroiled in a costly bid war.

"There have not been any discussions and we are not in any discussions with Verizon about any offer for Sprint," Vodafone said.

A spokesman for the firm also reiterated previous announcements that the company was not interested in gaining any more US assets itself.

Shares knocked

However, he declined to comment on any potential financial backing of expansion for Verizon.

Vodafone has not expressed any view on the US (situation) and does not intend to now

Earlier this year, Vodafone shares took a battering after its failed takeover attempt of US rival AT&T Wireless.

Investors bailed out fearing it had decided to take control of a US business at any cost in an effort to take its brand across the Atlantic.

Vodafone's denial followed a Wall Street Journal report that the UK mobile telecoms giant had given Verizon the go-ahead for a possible bid for Sprint, the third-largest mobile group in the US.

Such a move could have derailed an expected Sprint takeover bid for mobile firm Nextel, worth a reported $40bn (20.8bn).

Vodafone, which owns 45% of Verizon, said: "Vodafone has not expressed any view on the US (situation) and does not intend to now."

The Wall Street Journal said Sprint may outline Nextel merger terms on Tuesday.

However, the paper added that it could still be days or weeks before Verizon made any bid for Sprint.

Targets eyed

Verizon Wireless is currently the second largest mobile operator in the US.

A successful bid for Sprint would push it into the number one spot, overtaking Cingular Wireless.

Last week, Verizon was reported to be watching developments closely and had not ruled out making a move.

The Wall Street Journal cited sources who said Verizon had been studying a potential mobile deal for 18 months.

Vodafone has made clear in the past it is not interested in bidding either for Sprint or for Nextel directly, making backing for a Verizon bid the most likely option.

The newspaper said it expects Vodafone to find funds for a bid in proportion to its equity in Verizon, which at present would mean finding 45% of the cost.

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