Vodafone Group to Receive 2.1 Billion Pound Dividend From Verizon Wireless
LONDON -- Vodafone has drawn first blood in the ongoing saga with Verizon Communications over the ownership of Verizon Wireless, after the U.S. telecoms Goliath relented after claiming initially that Wireless's dividend payout was not assured this year.
Instead, today saw the Verizon Wireless board approve a dividend payment to the tune of 4.6 billion pounds, of which Vodafone will receive 2.1 billion pounds as a 45% stakeholder in the company, with the remaining 2.5 billion pounds heading to Verizon.
Previously, Verizon CEO Lowell McAdam had said that the top priority for Wireless is to pay down $5 billion worth of debt, due between now and mid-2014, in a move widely recognised as an attempt to force Vodafone's hand into selling its interest in Wireless.
However, to reference Owain Bennallack's analogy of these negotiations as a poker game, it appears that Verizon has failed with this bluff and folded on this particular round, with other Fools recognizing that Verizon needs the dividends as much as Vodafone.
The dividend will be paid out by the end of June 2013, and Vodafone management confirmed that it will provide an update on its plans on how best to utilise this dividend within its preliminary results, due on May 21. Whether it will be paid in the form of a special dividend, or to buy back shares, will interest shareholders hugely.
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The article Vodafone Group to Receive 2.1 Billion Pound Dividend From Verizon Wireless originally appeared on Fool.com.Sam Robson owns shares of Vodafone. The Motley Fool recommends Vodafone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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