Verizon refiles for wireless IPO

The IPO of Verizon Wireless, the country’s largest wireless company, based on 27.9 million subscribers, will fetch between $2 billion and $5 billion, analysts said. Verizon Wireless is 55% owned by Verizon and 45% by Vodafone Group.

Verizon Wireless is expecting the proceeds to fund most of the cost of wireless licenses it plans to acquire from bankrupt NextWave, assuming legal proceedings don’t block the sale. Verizon bid an estimated $8.8 billion for the licenses in January and already has paid a $1.8 billion deposit.

According to Verizon’s Chief Financial Officer Fred Salerno, even if Verizon reaches an agreement with NextWave soon, it probably won’t have to pay for the licenses until May or June 2002. Verizon hopes to complete the wireless IPO by the middle of 2002.

The company has numerous lending sources to tap for the portion of the license fees not covered by the IPO, Salerno said.

Another portion of the wireless proceeds will go to repay debt owned to Verizon Communications and for general corporate purposes. Verizon plans to spend a total of $4.6 billion on capital expenditures by the end of 2001.

The timing of the IPO refiling, coming one day after the Federal Communications Commission voted to ultimately repeal the spectrum cap, sparked discussion that a public offering of Verizon Wireless could be the company’s first step toward purchasing other wireless operators.

In Verizon’s earnings call last week, Salerno said Verizon Wireless is negotiating to buy Price Communications but such deals would be the exception rather than the rule.

Previously, Verizon and Price tabled a $2 billion deal. Verizon is hoping to fill coverage gaps in Georgia, Alabama, South Carolina a Florida.

Verizon Wireless originally filed a registration statement with the SEC in August 2000 but postponed the offering because of the market’s downturn. The deal’s lead underwriters are Goldman, Sachs and Merrill Lynch.