NEW YORK -- Verizon Communications Inc. is looking at selling off phone lines in the Northeast and Midwest, the company told employees yesterday.
The company did not provide further details. The message was a partial confirmation of a report in The Wall Street Journal, which said Verizon was looking to sell 5 million phone lines on the fringes of its service area for up to $8 billion.
The Journal, citing people familiar with the matter, said Verizon is shopping around two packages of lines: one in Vermont, New Hampshire, and Maine; and another in Indiana, Illinois, Ohio, and Michigan.
The article said that for tax reasons, Verizon was looking to spin off the companies to shareholders, then merge them with a company so small that Verizon shareholders would be a majority.
Stifel Nicolaus analyst Christopher King said CenturyTel shareholders would be unlikely to agree to such a deal. He pointed to even smaller companies like Iowa Telecommunications Services Inc., Fairpoint Communications Inc., and Commonwealth Telephone Enterprises Inc., as possible buyers.
Verizon is also looking to position itself as a growth company by selling its directory-publishing unit. Conversely, it wants to take full ownership of Verizon Wireless, a growth business, by buying out its partner, Vodafone Group PLC.
Shares of Verizon fell 1.6 percent to $32.34.