Vodafone in talks to sell stake in Verizon Wireless

A_Flock_Of_Sheep

Yes as much as I am a liker of Woodford I felt him doing that was not right hence my desire to hold VOD to compliment my holding in EDIN.

I think I am going to switch off from the Vanguard LS noise on here.

And yes EZJ seem to have healed a bit. But I am keeping an eye on my latest portfolio addition: James Fisher and Sons.

A_Flock_Of_Sheep

Actually I notice that AIM shares are now ISAble can anyone recommend and decent books or information about investing here. Does anyone here invest in AIM? If so how successful or how much of a failure was this?

IronWolf

I invest in AIM, there's nothing inherently wrong with it but for a slightly higher risk of fraud.

You should invest in AIM the same way you invest in any other market, just be aware of the liquidity and spreads of the shares.

IronWolf

I invest in AIM, there's nothing inherently wrong with it but for a slightly higher risk of fraud.

You should invest in AIM the same way you invest in any other market, just be aware of the liquidity and spreads of the shares.

sabretoothtigger

Dont bother just because you can. ITs more risky less regulated, half way house for companies to raise money and they often have no other income ie no actual business.
Can be alot of growth but the aim part is a minus if anything, takes alot to start up without losing lots of money

Strange but I think woodford takes up some aim shares. Mostly giant shares but I read also some of the smallest

planteria

from HL today:

"HL COMMENT (3 SEPTEMBER 2013)

Sale of 45% share stake in Verizon Wireless: Activity in the telecoms sector has recently increased. Vodafone has confirmed agreement of a deal to sell its interest in Verizon Wireless, with Europe becoming a particular focus, underlined by the subsequently announced acquisition of Nokia by Microsoft.

Vodafone is already well established in the European telecoms space and the disposal of its Verizon share stake should result in further focus on two fronts. There are pockets of the European operation which are struggling due mainly to economic constraints and fierce competition. However, the recent acquisition of Kabel Deutschland appears to be a clear statement of its intent. Elsewhere, Vodafone has certainly not ruled out selective acquisitions in the emerging markets, which currently account for some 30% of its business and where the demographics are arguably developing in its favour.

For shareholders, there is an important consideration. Whilst Vodafone may have sought to sever ties with Verizon, its shareholders, by default, have not. Based on the details of the deal, shareholders are left today, all things being equal, with a 47% stake in Vodafone, a 38% stake in Verizon Communications and the balance coming in the return of cash to shareholders.

The announcement has been well received and prospects for Vodafone remain promising. The share price has seen a 17% hike over the last year, as compared to a 13% hike for the wider FTSE100, and the current yield of 4.7% (as of 03Sept2013) is supportive at least until the New Year when the deal completes. As such, the market consensus of the "new" Vodafone as a buy is, we believe, likely to remain intact.

Highlights:
Vodafone has reached agreement to sell its 45% interest in Verizon Wireless to US listed Verizon Communications, for a total consideration of US$130 billion (£84 billion).
The consideration or proceeds will consist of:
US$58.9 billion (£38.0 billion) in cash,
US$60.2 billion (£38.9 billion) in Verizon shares,
US$5.0 billion (£3.2 billion) in the form of Verizon loan notes,
US$3.5 billion (£2.3 billion) in the form of Verizon's 23% minority interest in Vodafone Italy,
US$2.5 billion (£1.6 billion) through the assumption by Verizon of Vodafone net liabilities relating to the US Group.
Vodafone intends to implement a new organic investment programme, Project Spring, to establish further network and service leadership through additional investments of £6 billion over the next three financial years.
At completion, Vodafone shareholders are expected to receive all the Verizon shares and US$23.9 billion of cash (the "Return of Value") totalling US$84.0 billion (£54.3 billion), equivalent to 112p per share and representing 71% of the Net Proceeds.
Vodafone management expects that strong free cash flow generation will continue to underpin shareholder returns. The Board, therefore, intends to increase the total 2014 financial year dividend per share by 8% to 11 pence and intends to grow it annually thereafter.
Subject to the satisfaction of certain conditions, the transactions are expected to complete in the first quarter of 2014.
Vodafone intends to effect a consolidation of its ordinary share capital to seek to maintain broad comparability of its share price before and after the Return of Value.

Negative Points:
Completion of the sale is subject to the satisfaction of certain conditions, including the approval of Vodafone's and Verizon's shareholders and certain regulatory clearances, including from the FCC (Federal Communications Commission). Completion of the Vodafone Italy Transaction is subject to completion of the Verizon stake sale and to additional regulatory clearances, including European Union merger clearance.
The US mobile market has proved a growth area for Vodafone over recent years, a contrast to more challenged operations in Europe, particularly Southern Europe.
Verizon Wireless contributed £6.4 billion to Vodafone's consolidated profit before tax of £3.3 billion for the financial year ended 31 March 2013.
While no acquisitions following the sale are currently planned, the CEO noted that "the group could always borrow later if attractive deal opportunities crop up that would create value for shareholders." Vodafone's previous acquisition track record is arguably mixed. Under a previous CEO, it spent more than 150 billion euros in 2000 to acquire Germany's Mannesmann – significant write-downs in value were later made.
A sale of the Verizon Wireless stake will end a partnership of more than a decade, a relationship which has seen Verizon pay significant dividend payments to Vodafone.
Vodafone's CEO as of its mid July first quarter trading update noted that "regulation, competitive pressures and weak economies, particularly in Southern Europe, continue to restrict revenue growth."
Economic conditions in some emerging markets have recently become more challenging. Uncertainty over the outlook for the Indian economy has risen - Vodafone retains a significant presence in the country.
Competition across the cable industry, which Vodafone has joined given its takeover of Kabel Deutschland, remains intense. BT Group is soon to offer its own sports channels whilst rival TalkTalk has now launched its own TV offering. Liberty Global only recently completed a $24 billion acquisition of UK cable giant Virgin Media.
Questions with regards to the level of tax being paid by Vodafone on the sale have been raised.
Regulatory decisions or changes in the regulatory environment could impact on the business moving forward.

Positive Points:
Vodafone's Chairman noted that "our sustained investment in Verizon Wireless has created a great deal of value for shareholders from a market leader with great momentum. Verizon's offer now provides us with an opportunity to realise this value at an attractive price. The transaction will position Vodafone strongly to pursue our leadership strategy in mobile and unified communication services for consumers and enterprises both in our developed markets and across our emerging markets businesses. It will also enable us to provide substantial returns to individual shareholders."
Vodafone's CEO noted that "As a result of the transactions, we will also greatly enhance Vodafone's long-term prospects through Project Spring, our new programme of additional organic investments in 4G, 3G, fibre and broadband, enterprise services and improved customer experience across all of our markets. Project Spring will strengthen and accelerate our existing Vodafone 2015 strategy, enabling us to take even greater advantage of the growing global demand for ubiquitous high-speed data. This will in turn underpin our intention to grow the dividend per share annually, in line with our track record of providing shareholders with sustainable and high quality returns."
Concerns regarding increasing competition in the US mobile market have been expressed by some analysts. The sale of Verizon Wireless now may prove prudent going forward.
As a smaller company, Vodafone itself could become a takeover target. US companies looking to expand globally, for example, might find Vodafone's remaining businesses attractive.
As of the group's July (2013) first quarter trading update, Africa, Middle East and Asia Pacific (AMAP) service revenue including joint ventures increased by 5.9%. In India service revenue was up 13.8% driven by a more stable pricing environment, an improved process of customer verification and continued strong data revenue growth. In Emerging Markets, smartphone penetration continued to increase and was reported at 9.2% in India and 25.4% in Turkey.
Vodafone Red, the group's previously introduced pricing approach to Europe is performing well according to previous management comment. It now has 5.2 million customers with the goal to reach 10 million customers by March 2014.
Vodafone previously announced it aimed to offer 40% 4G coverage in its five main European markets by March 2015.
Following Vodafone's recent bid for Kabel Deutschland, the Management and Supervisory Boards of Kabel Deutschland welcomed the Transaction. The combination of Vodafone and Kabel Deutschland will create a leading integrated communications operator, with €11.5 billion (£9.8 billion) of pro forma revenues in Germany. Following completion of the transaction, Vodafone will have 32.4 million mobile, 5.0 million broadband and 7.6 million direct TV customers in Germany.
Vodafone will acquire Verizon's 23% minority interest in Vodafone Italy for US$3.5 billion (£2.3 billion), thereby securing full ownership of Vodafone Italy.
Vodafone's net debt at 30 June 2013, including joint ventures, was £24.9 billion. The Verizon Wireless sale could enable it to reduce debt further.
The group's dividend payment remains both attractive and progressive. Vodafone management expects that strong free cash flow generation will continue to underpin shareholder returns. Vodafone, therefore, intends to increase the total 2014 financial year dividend per share by 8% to 11 pence and intends to grow it annually thereafter."

http://www.hl.co.uk/shares/shares-search-results/v/vodafone-group-ordinary-usd0.11-37?tab=security_research&utm_source=Silverpop&utm_medium=email&utm_campaign=E00RN&utm_content=Share%20research&theSource=E00RN&Override=1

"HL COMMENT (3 SEPTEMBER 2013)

Announcement: In an announcement made after the London market close, Verizon Communications entered into an agreement to purchase Vodafone's 45% interest in Verizon Wireless. It signalled one of the largest deals in corporate history. Verizon Communications will pay Vodafone $130 billion and bring to an end an often strained relationship concerning the Verizon Wireless dividend, and who would ultimately seize full ownership. The sale will enable Verizon to retain 100% of the profits the US wireless business generates and give it full management control, removing the need for it to consult with Vodafone on key strategic moves, including major acquisitions. Under the terms of the deal, Vodafone will receive $58.9 billion in cash, $60.2 billion in Verizon stock, $5 billion in the form of Verizon loan notes, $3.5 billion being part of Verizon's 23% minority interest in Vodafone Italy, and $2.5 billion through the assumption by Verizon of Vodafone's net liabilities in relation to the US group, in a deal that is due to close in the first quarter of 2014. For now, market consensus opinion remains positive in tone, denoting a buy.

Negative Points:
The telecommunications landscape is changing. Competition is expected to intensify. Sprint Corporation was recently acquired by Japan's SoftBank Corporation and T-Mobile is making a resurgence. Today also saw Microsoft agree a deal to purchase Nokia’s mobile phone business for 5.4 billion euros.
In the short term, the sheer size of the transaction may limit Verizon in undertaking any further transactions.
Revenue pressure may be seen if Verizon engages in aggressive price wars.
Although adding smartphone customers bolsters revenues in the long term, it can impact on short term profits as carriers such as Verizon offer discounts on devices in return for longer contract times. The US market has also been slowing as smartphones become ever more popular.
Changes in regulation could potentially impact.

Positive Points:
The deal will become the third largest corporate deal in the world after Vodafone's $203 billion takeover of Germany's Mannesmann in 1999 and AOL's $181 billion acquisition of Time Warner in 2000. Verizon has also managed to raise one of the largest ever financing packages at $60 billion.
The deal, unanimously backed by the boards of Verizon and Vodafone still requires approval by regulators and shareholders of both companies. It is expected to close in the first quarter of 2014.
By owning all of the wireless operations, Verizon has enhanced its strategic position.
The deal is not expected to have a major impact on Verizon's 100 million customers. However, it should provide the company with an opportunity to boost its quarterly earnings since it will no longer have to share a proportion of proceeds with Vodafone, and position the company with a more competitive edge against its rivals.
During the group's second quarter (April to June) Verizon Wireless added 941,000 devices to its contract-based plans, exceeding analyst estimates and continuing a strong run. It also added 161,000 net new internet customers and 140,000 net new online video connections in the period.
A progressive dividend policy continues to be pursued. In a separate announcement on 2 Sept, Verizon raised its third quarter dividend by 2.9% to 53 cents per share. It is the seventh consecutive year that Verizon's board has approved a quarterly dividend increase."

http://www.hl.co.uk/shares/shares-search-results/v/verizon-communications-inc-com-stk-us0.10?tab=security_research&utm_source=Silverpop&utm_medium=email&utm_campaign=E00RN&utm_content=Share%20research&theSource=E00RN&Override=1

planteria

there is obviously a lot of time ahead to analyse and consider, but my current thoughts are that just holding Vodafone, and then holding both Vodafone and Verizon shares, would be a reasonable strategy. potentially the cash windfall could be reinvested in one/the other company too.

lvader

I bought another 1000 shares on todays drop, I'm happy to buy more if it drops further.

cepheus

bad news for the taxpayer. Perhaps the public accounts committee should investigate

BTW you can thank Gordon Brown for this tax gift. £12 billion lost.

A_Flock_Of_Sheep

lvader wrote: »

I bought another 1000 shares on todays drop, I'm happy to buy more if it drops further.

Can I ask why you purchased?

I think I might partake but they will need to drop a bit more before I would jump in. It is a bit like shutting the gate after the horse has bolted though as new shareholders today, tomorrow, next week can't benefit from the windfall surely????

VOD would be very much a buy and hold for me if I do dip in.