Communications stock Verizon (VZ) is about to get quite a bit bigger, and press back into at least some markets it had previously abandoned. Shareholders at Frontier Communications (FYBR) approved an offer from Verizon to buy the company, and Verizon shareholders seem all in favor. Verizon shares ticked up modestly in Wednesday afternoon’s trading as a result.
Verizon will be landing Frontier for a comparative bargain, a Reuters report noted, as it will shell out $9.6 billion to land the company. Several major investors in Frontier were working to land a higher price in return, but shareholders went overall with the bird in the hand rather than the two in the bush.
The deal will take a year and a half to close, reports note, but once it does, Verizon will pick up around $10 billion worth of Frontier’s debt, and pay $38.50 per share for the stock. That represents a 44% premium against its 90-day volume-weighted average, the report noted. Meanwhile, Verizon CEO Hans Vestburg declared the deal a “strategic fit” that would give Verizon access to several new markets.
Barbie Boost, Channels Lost
Meanwhile, Verizon is looking to turn to a little celebrity support to promote its home internet. Barbie will be stepping in, along with Ken, to kick off the “Barbie StreamHouse” campaign. With this campaign, Verizon will show off all the different ways that Verizon Home Internet can make a house better just in time for the holidays. This includes applications like gaming and streaming, as well as connected home devices.
And that streaming will be largely intact, too. A report from The Desk revealed that Verizon FiOS systems might have lost TEGNA stations over a distribution dispute. However, a subsequent agreement would keep TEGNA stations in place for a while, even if terms around the deal were not disclosed.
Is Verizon Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on VZ stock based on eight Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 19.88% rally in its share price over the past year, the average VZ price target of $46.47 per share implies 13.88% upside potential.
