Vodafone Holds On to Verizon Stake
Under a "put option" agreement Vodafone had the right to sell a slice of its holding, worth $10 billion, to Verizon Communications Inc. (NYSE: VZ), which owns 55 percent of Verizon Wireless. The British mobile giant had to make its decision by August 9, and announced this morning it had "decided not to exercise its rights." (See Vodafone Keeps Verizon Stake.)
The wireless carrier, which has 232 million subscribers worldwide, also noted that "this was the final such option available to Vodafone." (See Vodafone Unveils Q1 Interims.)
Had it decided to sell, Vodafone's holding in Verizon Wireless would have dropped to about 38 percent.
Vodafone's CEO Arun Sarin has been under pressure from some investors to cash in on the Verizon Wireless holding, but Sarin has said time and time again that he regards the U.S. wireless carrier as a "high performing business" and a good investment. He stated during a recent conference call that Vodafone "continues to see a healthy future for the business." (See V'fone Investors Reject Efficient Demands.)
Vodafone's decision did not come as a surprise to investors. The mobile operator's share price remained static this morning at 159.4 pence on the London Stock Exchange , giving it a market value of just more than £88 billion ($178 billion).
— Ray Le Maistre, International News Editor, Light Reading