Verizon ‘Serious’ About Making Bid for Netflix, Banker Says

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Dec. 12 (Bloomberg) -- Verizon Communications Inc., the second-largest U.S. phone company, is “very serious” about a bid to acquire online movie provider Netflix Inc., an investment banker said.

Verizon may kick off a bidding war for streaming-video pioneer Netflix that could result in a sale by Easter for about $4.6 billion, said Porter Bibb, managing partner at Mediatech Capital, in a television interview on “Bloomberg West,” citing unnamed people within Verizon.

“I am hearing rumblings from inside Verizon that they are very serious about either Netflix or something similar,” Bibb said.

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. Los Gatos, California-based Netflix has a market capitalization of $4.17 billion.

Verizon, based in New York, is considering an offer for Netflix because telecommunications companies are concerned they will shoulder the increasing costs of transmitting video over their networks as providers such as Netflix, Amazon.com and Hulu LLC decline to share their profits, Deal Reporter reported earlier today, citing people with knowledge of the matter.

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

Netflix, which offers subscriptions for video streaming and DVDs by mail, rose 6.2 percent to $75.26 at the New York close. The stock has fallen 57 percent this year.

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Netflix stock price rises thanks to Verizon buyout rumors

The US stock market is getting hit with bad news today thanks to the ongoing European financial crisis, with the overall stock market down 2%. That's not the case over at Netflix however: the stock price for the streaming movie and TV services is currently soaring by as much as seven percent today. Why? It's all due to a new rumor that hit the Internet today that claims Verizon is interested in acquiring Netflix.

The rumors started today with a story on the subscription-based web site Dealreporter.com which cited unnamed sources. Details about this possible acquisition are scarce but even the hint of such a buyout was more than enough to get investors to buy some Netflix stock today. Neither Netflix nor Verizon have commented on this new rumor.

This new story comes as yet another rumor came out last week that claimed Verizon was planning to launch its own streaming video service as a rival to Netflix sometime in 2012. That news actually sent Netflix's stock price down by three percent.

A merger between the two companies might be a perfect fit, even if this rumor turns out not to be true. Netflix's content deals with Hollywood movie and TV studios combined with Verizon's national reach as a wireless carrier could actually work out well.

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