Bloomberg News

Verizon Said Not to Have Discussed Making Offer for Netflix

December 14, 2011

Dec. 13 (Bloomberg) -- Verizon Communications Inc., the second-largest U.S. phone company, hasn’t discussed making a bid for Netflix Inc., according to two people with knowledge of the situation.

The two companies haven’t held talks about a transaction, said the people, who asked not to be named because the matter is private.

Netflix gained 6.2 percent yesterday in New York trading after Deal Reporter, a trade publication, said that New York- based Verizon is considering an offer for the Los Gatos, California-based movie streaming service. The publication didn’t identify its sources. Porter Bibb, managing partner at Mediatech Capital Partners, said yesterday that Verizon may bid for Netflix or a rival.

“I am hearing rumblings from inside Verizon that they are very serious about either Netflix or something similar,” Bibb said in a television interview yesterday on “Bloomberg West,” citing unnamed people within Verizon. He didn’t identify them.

Bibb said he is not working for either company. Netflix was a client in the past, he said today.

Steve Swasey, a Netflix spokesman, and Torod Neptune, a spokesman for Verizon, declined to comment on the reports.

Netflix, which offers subscriptions for video streaming and DVDs by mail, rose 1.2 percent to $76.13 at 11:23 a.m. in New York trading. The shares have fallen 57 percent this year before today. Verizon added 0.1 percent to $38.38 and has advanced 7.2 percent this year before today.

Redbox Talks

Verizon has been meeting with movie-rental kiosk operater Redbox, a unit of Coinstar Inc., in an effort to work out a content-distribution plan, a person familiar with the talks said on Dec. 8. The carrier has also met with other potential video partners and final details for any arrangement haven’t been determined, the person said then.

“Verizon’s not interested in Netflix, they see Redbox as a much better fit,” said Sam Greenholtz, an analyst with Telecom Pragmatics in Westminster, Maryland, who has consulted for Verizon and was briefed by its employees about its plan.

Verizon Chief Executive Officer Lowell McAdam told an investor conference on Dec. 7 that the company aims to move beyond its FiOS TV service into the streaming-video business.

“We continue to look at alternatives,” McAdam said at a UBS investor conference in New York.

Mediatech Capital, based in New York, was formed in 1996 and provides advice to media and technology companies, according to its website. Its clients include Spearhead Ltd., China Finance Centre and Xinhua Finance Ltd., according to the website.

Before starting Mediatech, Bibb was a partner and managing director for Ladenburg Thalmann & Co.

--With assistance from Jonathan Erlichman and Scott Moritz in New York, Cliff Edwards in San Francisco and Ronald Grover in Los Angeles. Editors: Anthony Palazzo, Peter Elstrom

To contact the reporter on this story: Anthony Palazzo in Los Angeles at apalazzo@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


Ebola Rising
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus