What Vodafone Group plc Shareholders Need To Know About The Verizon Stock Windfall

Vodafone Group plc (LON:VOD) gives details of the issue of Verizon shares and its own share consolidation.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

vodafone

This morning Vodafone Group (LSE: VOD) (NASDAQ: VOD.US) issued a statement on the number of Verizon (NYSE: VZ.US) consideration shares that will be issued to eligible shareholders, as part-proceeds from the sale of its 45% stake in Verizon Wireless, and explained the way the imminent Vodafone share consolidation will work.

Based on the volume-weighted average trading price of Verizon shares over the 20 days to the close of the  New York Stock Exchange yesterday — which was $47.1852 per share — a total of 1,274,764,121 Verizon common shares are to be issued. This means that, under the return of value, eligible shareholders will get 0.026 Verizon common shares for each Vodafone ordinary share they hold. The Verizon shares will be credited to eligible shareholders next Monday, 24 February.

And Vodafone’s share consolidation will also take place on Monday, at 8am, with shareholders receiving 6 new ordinary shares for every existing 11 Vodafone ordinary shares they hold.  The ratio was decided on a formula comprising the mid-market closing price of Vodafone ordinary share, the a mid-market closing price of Verizon common shares and the prevailing US dollar-sterling exchange rate, as of yesterday, 18 February.  

In order to make the number of issued shares divisible by the consolidation ratio, Vodafone will be buying a grand total of just 8 of its own shares sometime today, and then cancelling 3 of its Treasury shares. So, not all elements of what will be the biggest ever return of value to shareholders involve huge sums of money!

As an illustrative example, and assuming everything is approved by the court on Friday (essentially a formality, but you never know), Vodafone says that the return of value will be equivalent to 102p per Vodafone ordinary share, which will be given to shareholders as 72p in Verizon common shares and 30p in cash. As mentioned, the Verizon shares will be credited to eligible shareholders on Monday, and the cash element will be paid on Tuesday 4 March, with any fractional entitlements being settled the following week, on Monday 10 March.  

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Jon owns shares in Vodafone.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »