The deal would set Comcast back by around $215 billion, a 20% premium on Verizon’s current share price, according to Citi analyst Jason Bazinet in a research note. A deal would help the cableco extend its presence outside of the home.
Te overlap between the two telcos targeted areas for growth would justify a merger, Bazinet claimed, giving Verizon access to Comcast’s entertainment offerings at a time it is potentially going to have to compete with a merged AT&T and Time Warner.
Verizon’s future has been awash with speculation, with some even linking the US firm with a bid to buy the Walt Disney Company. Speculation has also suggested it could bid for Dish Networks.
“It’s a call Comcast should make … and Verizon should take,” wrote Bazinet. The analyst also noted that the regulatory climate under the current Trump administration may be more sympathetic to large combinations, with a deal between the two potentially generating synergies of around $2.1 billion.
If Comcast was to go down that route, it would face selling off some parts of its existing cable business – around 16% according to Bazinet – where it clashes with Verizon’s FiOS network.
