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Vodafone Holds on to Entire Verizon Wireless Stake

1:44 am on August 9, 2007 | Category: Business, Corporate, Wireless

British cell phone giant, Vodafone Group, reiterated yesterday that it would not be selling any part of its 45% stake in Verizon Wireless, after investors overwhelming rejected calls to sell or spin off the joint venture last month.

Vodafone says it will not exercise its option to sell up to $10 billion of its stake in the joint venture to American telecom giant, Verizon Communications, which owns the other 55%. Taking advantage of this option would have valued Vodafone’s stake at approximately $45 billion, but many analysts believe that it would have damaged Vodafone’s bargaining position if it sought to sell its entire stake at a later time.

Some shareholders, including the activist group, Efficient Capital Structures, are frustrated that the value of Verizon Wireless is not fully reflected in Vodafone’s share price, and that the U.S. wireless unit is not expected to reinstate dividend payments until 2009 at the earliest.

EFC’s proposal to sell the Verizon stake was defeated, however, at Vodafone’s annual general meeting last month, by a margin of over 90%.

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