NEW YORK (TheStreet) -- Shares of Liberty Global (LBTYA) are slightly lower at $51.80 in pre-market trading after sources told Bloomberg that Vodafone Group (VOD) is considering a combination with John Malone's company to create a European phone, Internet and TV company valued at more than $130 billion.
The British phone company is holding internal deliberations and analyzing the financial and regulatory hurdles as well as investor support for a share-based transaction, the sources said.
No formal negotiations with Liberty are under way, there's no guarantee a deal will be reached, and valuation and regulatory issues remain key obstacles, the sources added. In particular, Vodafone has concerns about the combined company's debt levels and the reaction of its own investors to a deal, one source noted, Bloomberg reports.
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Shares of Vodafone are down 3.75% to $35.18 in pre-market trade.
TheStreet Ratings team rates LIBERTY GLOBAL PLC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIBERTY GLOBAL PLC (LBTYA) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."