Blackstone Group, the private equity firm, has denied reports that it is teaming up with two telecoms companies to launch an audacious $96 billion bid for Vodafone.

Responding to a report in this morning’s Daily Mail newspaper, Blackstone said it knew nothing of a plan to join forces with America’s Verizon Communications and Spain’s Telefonica to bid for the troubled mobile phone giant.

The newspaper cited "documents circulating the City" stating that the consortium are looking for funding to complete a 160p a share takeover.

If the bid was successful it would lead to a complicated break up with Verizon taking control of Vodafone’s US and UK assets and Telefonica grabbing the European operations, the paper said.

Analysts described the report as speculative but said it was unusual for private equity groups to comment on such stories.

This morning’s report coincided with a broker upgrade to send Vodafone’s shares 1.25p higher to 127p but by mid afternoon the price had slipped back to 126.25p, valuing the company at £78 billion. Track Vodafone shares here.

Last week Vodafone unveiled an organisational revamp that will see it split into three new business units - run by three separate chief executives.

The move, designed to cut costs in Europe and America while increasing profits in emerging markets, was widely considered an attempt by Arun Sarin, Vodafone’s embattled chief executive, to deflect growing criticism of his strategy and management style after a damaging boardroom split that saw Sir Christopher Gent resign as life president.

Vodafone said it will create two geographical business divisions - one for Europe and the other covering central Europe, the Middle East, Asia Pacific and affiliated areas.

The third division will be called New Business and Innovation, and will concentrate on finding new sources of revenue and developing product lines, particularly involving converged and mobile internet services.

Keep up to date with the latest Markets news here

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive