Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a700380
£54bn payday for Vodafone shareholders
by Gavin Lumsden on Sep 02, 2013 at 18:06
Vodafone has announced the terms of the $130 billion sale of its stake in Verizon Wireless.
Verizon Communications, the US company that owns 55% of the joint venture, will pay Vodafone £38 billion ($58.9 billion) in cash and £38.9 billion ($60.2 billion) in its own shares.
The remaining £5.5 billion ($8.5 billion) will be in loan notes and Verizon's 23% stake in Vodafone's Italian business
This makes it the third biggest ever corporate deal after AOL's $181 billion acquisition of Time Warner in 2000 and Vodafone's $203 billion purchase of Mannesman AG of Germany in 1999.
Vodafone says its shareholders should receive all the Verizon shares and $23.9 billion (£15.4 billion) the cash.
It says this represents 71% of the net proceeds and is equivalent to 112p per share.
In addition, the company says it will increase its dividend by 8% in 2014.
Group chief executive Vittoria Colao said it would also use the money to finance 'Project Spring', a new programme of investment in 4G, 3G, broadband and other services.
Vodafone (VOD.L) shares rose 3.4% to nearly 214p before the news was announced after the market closed.
Tomorrow we will report in more detail what the deal means for shareholders. In the meantime you can read which funds are the biggest investors in Vodafone.
News sponsored by: