Verizon Wireless Customer You Are Calling Is Not Available
LONDON (MarketWatch) -- Vodafone proxy shareholders Tuesday backed management's U.S. strategy as they massively rejected a phone call for the British mobile-telephone giant to spin off its 45% stake in Verizon Wireless, the No. ane mobile operator in the U.S.
More than than 93% of proxy shareholders, which make up the vast majority of institutional investors, rejected resolutions put forward by activist investor Efficient Capital Structures at Vodafone'south annual shareholder meeting in London Tuesday. The full results of the vote will exist known afterwards this afternoon.
Efficient Capital Structures, headed by former Marconi executive John Mayo, wanted Vodafone (VOD) VOD,
Vodafone Chairman John Bail told journalists on the sidelines of the meeting that the board noted the strength of the vote against that movement. He best-selling that the issues raised by the resolutions were important, but stressed that they were regularly examined by the lath.
"I don't think we can have a rethink, we're thinking about it all the time," he said of Vodafone's U.S. strategy.
Vodafone shares fell i.4% in London afternoon trading.
Bond denied that Vodafone and Verizon Communications VZ,
"There is no impasse. There is a partnership," he said.
Chief Executive Arun Sarin said the board will employ the weeks until Aug. nine to decide whether to exercise a put selection to sell the Verizon Wireless pale. He emphasized that no decision has been made, and said Vodafone's partners would be informed first of any such move.
This is the fifth and final year that Vodafone has the chance to sell its minority holding. In the past it has opted confronting such a motion.
Sarin told investors once once again that the business is growing in the "double digits" and that at that place are no signs of a slowdown. He said final week that the value of the asset has risen to $xv billion over the last twelvemonth.
Individual shareholders at the meeting were song in their support of Sarin. Several of them, who said they had lost money under Mayo's direction of Marconi, defendant Efficient Majuscule Structures of distracting Vodafone's management and wasting its time.
The results of Tuesday's vote will non come up as a surprise to ECS. Chairman Glen Cooper told the Fiscal Times in an interview published Tuesday that the resolutions weren't probable to be approved.
"I would concede we are unlikely to get a majority for that resolution," he reportedly said.
Nevertheless, the extent to which proxy shareholders rejected its proposals may come as a disappointment.
Over the weekend the Sunday Times reported that the group had won support from leading fund managers including Jupiter, Invesco Perpetual, Calpers and Calyon, owning in full well-nigh ten% of Vodafone Group.
Growing pressure level
In the last few months, however, force per unit area has been mounting for Verizon Communications and Vodafone to reach a solution on the company they created in 2000, when they pooled their U.S. mobile operations.
Verizon Communications, which faces increased competition from AT&T T,
Terminal week shares of Verizon Communications soared briefly following a report that Vodafone's lath had contemplated making a $160 billion bid for the company as a fashion to have command of the joint venture. Sarin later on denied that the board had ever studied that pick and said Vodafone has no plans to make an offering for Verizon. See full story.
Vodafone shares are up roughly xiii% since the outset of the year, outperforming London'due south benchmark FTSE 100 share index (UKX).
Fortis analysts on Monday said that while they expected Vodafone to beat off ECS's demands at the meeting, the questions were unlikely to get abroad. They noted that "the current situation highlights the dilemma in existence a minority partner."
"Information technology is simply not able to call the shots," the broker said of Vodafone.
CIBC Earth Markets analysts, meanwhile, noted that with the added support of major fund managers, it is "increasingly likely" that a change to the existing Verizon Wireless joint venture will occur within the side by side year.
Information technology argued that while a spin-off of the stake is by far the most shareholder friendly option for both companies, a cash buyout past Verizon, in the $70 billion range, is the almost probable outcome.
Source: https://www.marketwatch.com/story/vodafone-shareholders-reject-verizon-wireless-spin-off
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