Newspaper article The Journal (Newcastle, England)

Vodafone Sells Stake INVERIZON for PS84bn; TELECOMS

Newspaper article The Journal (Newcastle, England)

Vodafone Sells Stake INVERIZON for PS84bn; TELECOMS

Article excerpt

Byline: COREENA FORD coreena.ford@ncjmedia.co.uk

INVESTORS in Vodafone will receive a PS54bn cash and shares windfall after the telecoms giant sold its share in Verizon Wireless for PS84bn.

The group confirmed one of the biggest corporate deals in history by agreeing to sell its 45% stake in the US operator to its joint venture partner Verizon.

The deal will net investors in Vodafone 23.9bn US dollars in cash (PS15.4bn), plus Verizon shares, a total 84bn US dollars (PS54.3bn) payout - equivalent to 112p per Vodafone share.

Vodafone announced the longanticipated 130bn US dollar deal after the London stock market had closed.

The bulk of the proceeds from the deal - 71% - will go to Vodafone shareholders, who could cash in their Verizon shares to take the entire windfall as cash.

But the deal will not involve a tax payment to the UK exchequer, the company revealed, risking further controversy after intense scrutiny of its tax affairs.

Vodafone will pay tax of 5bn US dollars (PS3.2bn) in the US, but said the UK is not a "relevant jurisdiction" because its US arm is owned by a Dutch holding company. It added even if the stake was sold from the UK, it would not be taxable under UK law because of an exemption introduced in 2002.

Boss Vittorio Colao said the sale will mean a "very substantial return to shareholders and to the investments relied upon by savers and pensioners".

The deal has been seen as a major cash injection into the UK economy - effectively another dose of quantitative easing.

Mr Colao said its stake in Verizon Wireless has proved "extremely valuable", but added the PS20bn of cash it retains will go to funding investment in super-fast mobile networks and broadband, as well as paying down debt.

"This transaction has the beauty that it allows both to reward shareholders for their support and strengthen the company for future long-term rewards to shareholders," he said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.