By Jonathan Stempel
NEW YORK, Sept 6 (Reuters) - Verizon Communications Inc has been sued by a shareholder seeking to void its $130billion buyout of Vodafone Group Plc's stake in thecompanies' wireless joint venture on the grounds the price istoo high.
In a lawsuit filed in a New York state court on Thursday,just three days after the transaction was announced, NatalieGordon said Verizon shareholders are being "shortchanged" by thepurchase of Vodafone's 45 percent stake in Verizon Wireless, thelargest U.S. mobile phone operator.
Verizon, which owns the other 55 percent, agreed to payVodafone $59 billion in cash, $60 billion in stock and othersums. Verizon Wireless has about 100 million customers.
Gordon said "it is evident that Verizon has overpaid,"adding that "Wall Street analysts concur" and that Moody'sInvestors Service downgraded Verizon's credit.
She also pointed to a drop in Verizon's share price to$45.08 on Sept. 3, the first trading day after the purchase wasannounced, from a peak of $48.60 on Aug. 29, when news thatVerizon and Vodafone had revived talks surfaced. The lawsuitcharacterized the 7.2 percent decline as "almost 10%."
The lawsuit seeks class-action status, and also namesVerizon Chief Executive Lowell McAdam and 12 directors asdefendants, accusing them of breaching their fiduciary duties.
It seeks to force Verizon to rescind the purchase or improvethe terms, and force the individual defendants to pay damages.
"We believe this lawsuit is entirely without merit, andVerizon intends to defend itself vigorously," Randal Milch,Verizon executive vice president and general counsel, said in astatement.
Vodafone, which is not a defendant, declined to comment.
Gordon is represented by law firm Faruqi & Faruqi, and haswithin the last five years been a shareholder plaintiff inseveral other lawsuits filed by that firm, court records show.
Juan Monteverde, a partner at the New York-based firm, didnot immediately respond to a request for comment.
The Verizon-Vodafone transaction would be the third-largestin corporate history, and end their 14-year joint venture.
Talks resumed in earnest this summer as Verizon grewconcerned that rising interest rates might make a transactiontoo pricey.
The price rose from the $100 billion that Verizon hadearlier floated, people familiar with the matter said.
Moody's one-notch downgrade left Verizon's long-term creditrating at "Baa1," a low investment grade, reflecting thecompany's plan to add $67 billion of debt and more than doubleits debt load. Nonetheless, Moody's ratings outlook is "stable."
The case is Gordon v. Verizon Communications Inc et al, NewYork State Supreme Court, New York County, No. 653084/2013.
Vodafone (VOD)
