The shares of Vodafone (LSE: VOD) (NASDAQ: VOD.US) slipped 3p to 210p during early trade this morning after the telecoms group confirmed last night that it had agreed to sell its 45% stake in Verizon Wireless for $130bn.
The FTSE 100 member yesterday revealed that Verizon Communications (NYSE: VZ.US) would acquire the stake in exchange for cash of $59bn, Verizon stock of $60bn, loan notes of $5bn and a 23% minority interest in Vodafone Italy.
Vodafone said the transaction should complete during the first quarter of next year and that the company would pass on all of the Verizon stock as well as cash of $24bn — worth a total £54bn or 112p per Vodafone share — to shareholders.
The blue chip confirmed anybody holding fewer than 50,000 Vodafone shares would be able sell their Verizon shares at completion in a “straightforward and cost-effective manner” through a dealing facility set up by the US group.
Vittorio Colao, Vodafone’s chief executive, said:
“We are pleased that our long and successful partnership with Verizon will yield a significant return of value to our shareholders, rewarding them for their continuing support of Vodafone’s investment strategy.“
Mr Colao added that he expected Vodafone’s “strong free cash flow generation” to continue to “underpin shareholder returns” and confirmed the 2014 ordinary dividend would be lifted 8% to 11p per share.
Other guidance for the current financial year included an operating profit of around £5bn and free cash flow of between £4.5bn and £5bn.
Of course, whether the prospect of a bumper 112p per share payout and an 8% lift to the ordinary dividend both combine to make Vodafone’s shares a ‘buy’ right now is something only you can decide.
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> Maynard does not own any share mentioned in this article. The Motley Fool has recommended Vodafone.
