Vodafone shareholder cash return

mutley74

I got few Vodafone shares.
I had hoped the cash return from Verizon sale was a cash dividend back to shareholders. But since the sale news share price has really only changed from 190p to stabilise around 210p. Has the 112p return still to be factored in?

After reading HL summary of the new deal for shareholders, can someone help in figuring out the benefit for longer term?

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http://www.hl.co.uk/news/articles/vodafone-cashes-in
Hargreaves has provided the following worked example of how the deal breaks down.
A holder of 1000 shares in Vodafone currently carries a value of £2083. As a result of the announcement this equates to
- 1000 shares in the “new” Vodafone (208.3p – 112p = 96.3p) = £963
- Special dividend at 32p per share = £320
- 26 shares in Verizon (based on Verizon’s latest price of $47.34 and assuming an exchange rate of 1.55 = £30.54 per share) = £800 (rounded up)
- Total = £963 + £320 + £800 = £2083
Put another way, an investor with a £5000 investment in Vodafone
- Has 2400 shares (5000/208.3p)
- Equates to 2400 shares in the “new” Vodafone at 96.3p = £2311
- Special dividend at 32p per share = £768
- 62 shares in Verizon at £30.54 per share = £1920 (rounded up)
- Total = £2311 + £768 + £1920 = £4999

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jimjames

Vodafone will be worth less after the sale as it was a big source of income and value for them.

The payment may not be fully factored in but the price will drop once the dividend is paid out.

Linton

The possibility of a sale will have been partially factored into the price for some time. The stock market moves on a rumour more than it does on an expected event.

planteria

have a read here mutley...

https://forums.moneysavingexpert.com/discussion/4752991

C_Mababejive

AFAIK eventually you will hold Vod shares,a dividend and some verizon shares. The Verizon shares will pay divis in $USD so if you choose to keep them,you will likely have to pay a small charge each time they payout a divi. Chances are you will be offered the opportunity to sell the verizon shares.

Biggles

C_Mababejive wrote: »

Chances are you will be offered the opportunity to sell the verizon shares.

Unless you already hold foreign shares, you need to hope they do give you an option to sell. Foreign shares can cost you to hold and will certainly cost you to receive the dividends and, eventually, to sell.

Thrugelmir

mutley74 wrote: »

But since the sale news share price has really only changed from 190p to stabilise around 210p. Has the 112p return still to be factored in?

I've seen one analysts report that reckons 215p is fair value for Vodafone currently.

That's on the basis that VZ holding is worth 140p to VOD per share. The remaining VOD trading business has a fair value of 75p.

theGrinch

after reading the telgraph today I was left with the impression that there is no "bonus" here once the share price adjusts.

markwilkinson

theGrinch wrote: »

after reading the telgraph today I was left with the impression that there is no "bonus" here once the share price adjusts.

I posted a link to that article (I think its the same one) in the other thread on this subject, below this one.

The 'dividend' and Verizon shares, in my opinion, amount to little more than shirt term compensation for the drop in share price, as a consequence of the sale.

The option to sell now, while the price is relatively high (depending on the price paid when bought) is a very valid one. Again, in my view, the crux of the problem lies in wether an individual investor sees a promising future for Vodphone, post sale.

Ifts

C_Mababejive wrote: »

Chances are you will be offered the opportunity to sell the verizon shares.

Biggles wrote: »

Unless you already hold foreign shares, you need to hope they do give you an option to sell.

Additional shareholder facilities

At Vodafone’s request, Verizon has agreed to provide Vodafone shareholders holding fewer than 50,000 Vodafone shares with the means of realising the value of their Verizon shares at completion in a straightforward and cost-effective manner through a dealing facility. The availability of such facility will be subject to regulatory considerations, the requirements of the Listing Rules and other practicalities.

In addition and subject to applicable securities laws, Verizon will make arrangements to provide shareholders with CREST Depositary Interests (“CDIs”) and related facilities to allow settlement of trading in Verizon shares through CREST.

http://www.vodafone.com/content/index/media/group_press_releases/2013/vodafone_to_realiseus130billionforits45interestinverizonwireless.yes.html

Thrugelmir

markwilkinson wrote: »

Again, in my view, the crux of the problem lies in wether an individual investor sees a promising future for Vodphone, post sale.

What's changing fundamentally? Vodafone's core trading has been under pressure for some time. Dividends have only been buoyed up by the contribution from VZ.

VZ may be the better prospect going forward.