logo
Share SHARE
FONT-SIZE Plus   Neg

Verizon Communications Plans To Issue 1.27 Bln Shares To Vodafone Shareholders

Verizon Communications Inc. (VZ: Quote) said Tuesday that it expects to issue 1.27 billion shares of its common stock to shareholders of British telecom giant Vodafone Group Plc (VOD: Quote,VOD.L) in connection with its acquisition of Vodafone's indirect 45 percent stake in the Verizon Wireless joint venture.

Verizon Communications expects to close the transaction and issue the 1,274,764,121 shares of its common stock on February 21, 2014, subject to customary closing conditions and approval from the High Court of Justice of England and Wales.

Verizon Wireless is the U.S. wireless joint venture between Verizon Communications and Vodafone, with Verizon owning a 55 percent stake and Vodafone owning a 45 percent interest. The joint venture began operations as Verizon Wireless on April 4, 2000.

Verizon struck a deal with Vodafone in September 2013 to acquire the Vodafone stake in a $130 billion deal. This includes $58.9 billion in cash, $60.2 billion in Verizon stock, and the remaining $10.9 billion from smaller deals. The deal will see Verizon Communications gain 100 percent control of Verizon Wireless.

In late January this year, shareholders of both Vodafone as well as Verizon approved the buyout by Verizon of Vodafone's 45 percent stake in the Verizon Wireless joint venture. The deal, which was backed by 99.76 percent of Vodafone shareholders, is expected to close by February 21.

At a special meeting in January, shareholders of Verizon Communications also approved the company's issuance of up to 1.28 billion shares of common stock to Vodafone shareholders to complete the deal.

Vodafone will return $84 billion of the net proceeds of $130 billion to its shareholders, with more than two-thirds in the form of stock. It is billed as the largest ever single return of value to shareholders in corporate history.

The $130 billion deal, which ends a 14-year partnership and marks Vodafone's exit from the U.S. mobile market, would be the second biggest all-time corporate deal, behind Vodafone's $172 billion acquisition of Mannesmann AG in 1999.

Verizon had been contemplating the buyout of the Vodafone stake several times in the past decade, but pricing had been the biggest stumbling block, along with the risk of raking up a huge tax bill nearing $10 billion.

VZ closed Tuesday's trading at $45.98, down $0.53 or 1.14 percent on a volume of 34.93 million shares. In extended trades, the stock further edged down $0.08 or 0.17 percent to $45.90.

VOD closed Tuesday's regular trading session at $37.09, up $0.28 or 0.76 percent on a volume of 9.70 million shares. In after-hours, the stock further edged up $0.01 or 0.03 percent to $37.10.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Internet giant Google Inc. (GOOGL, GOOG) has launched a new online flight search tool that makes it easy to find out the best flight deal. The tool dubbed "Google Flights" provides a calendar that one can scroll through and see the lowest fare highlighted for each day. One can also use the lowest... Hyperloop Transportation Technologies, a start-up that has adopted Elon Musk's ambitious project of high-speed transportation system, plans to build a Hyperloop test track in California and completed as early as 2016. Hyperloop Test Technologies, a crowd-funded company, plans to take Musk's dream... Colors have set the social media afire after an otherwise innocuous photo of a bodycon dress kept users guessing as to what hues permeate it. Opinions are divided, with some seeing the dress as white and gold, and others as blue and black. The photo was posted on Tumblr by a user called Swiked.
comments powered by Disqus
RELATED NEWS
Trade VZ now with 
Follow RTT