At completion, Vodafone shareholders are expected to receive all the Verizon shares and $23.9bn (£15.42bn) of cash and all the shares, equivalent to 112p per share and representing 71% of the net proceeds.http://www.digitallook.com/news/21131814/Vodafone_approves_sale_of_key_US_unit_dividend_to_rise_11_per_cent.html?username=,&ac=,
Before the announcement analysts at Jefferies were placing a value of 151p per share on the wireless stake post the capital gains tax.
Following on from the above the Board intends to increase the total 2014 financial year dividend per share by 8% to 11p, and intends to grow it annually thereafter.
http://www.digitallook.com/news/rns/21131721-10097/VOD-VODAFONE_TO_REALISE_130BN_FOR_45_INTEREST_IN_VZW_html?ac=,&username=,
The company will now have to look for growth in other areas, but with billions to invest they ought to be able to find a few new ventures worth. There must be quite a few smaller companies out there that might be on Vodafone's shopping list.
Update.
ReplyDeleteYesterday saw profit taking after the price rise of the previous few sessions. However, the price did seem to fall like a damp squib after the announcement, so Vodafone shareholders might be wondering what the value of the company is. Once the Verizon stake is gone, the market will concentrate on how the company plans to grow going forward.
One view is that value will remain.
"Price discovery is what the Vodafone deal is all about. In sterling terms, Vodafone is getting about 85bn pounds for the stake, whereas its market capitalisation at the end of last week was a smidgeon short of 100bn pounds. Even if you add on 25bn pounds of debt it is clear that the Voda rump was valued fairly cheaply. Further, the transaction leaves a company worth about 45bn pounds, when allowance for debt is made. In turn, that means it is selling at just three times' earnings and offering a dividend yield of more than 5 per cent. In parallel, the rate of decline in organic service revenues, the usual measure, was bottoming out, its latest figures showed. Yes, the resulting company will be a somewhat riskier investment henceforth and it will probably carry out acquisitions given its need to raise the number of services it offers. Nevertheless, they will also inevitably attract a bid premium. This is not the time to hang up on Vodafone, says The Times's Tempus."