Vodafone on track for Verizon dividend

Marion Dakers
MOBILE phone operator Vodafone came a step closer to persuading Verizon to pay a dividend last week after bosses from the two firms held secret meetings in New York, reports said yesterday.

Vittorio Colao of Vodafone and Ivan Seidenberg of Verizon met to discuss Vodafone’s 45 per cent stake in Verizon Wireless, according to the Observer. The US arm of Verizon has not paid a dividend since 2005, causing many Vodafone shareholders to demand for the firm to dispose of its stake.

However, Vodafone faces a £10bn bill for capital gains tax if it sells its stake, thought to be worth around £33bn.

A spokesperson for Vodafone declined to comment yesterday on whether the pair had met. Verizon also refused to comment.

Verizon has previously said it expects to pay dividends by 2012, once it has paid down debts linked to its acquisition of rival Alltel last year. Chief financial officer John Killian said in June there was a “reasonable chance” of issuing a dividend in two years, but stressed that Verizon alone had the power to resume payments.

Verizon, which owns the remaining 55 per cent stake in Verizon Wireless, has also voiced a wish to acquire the entire business once its debts are resolved.

Meanwhile, Vodafone has been reviewing its various minority holdings, raking in £4.3bn from its sale of its three per cent stake in China Mobile last month.

Chairman Sir John Bond survived calls for his resignation over his acquisition track record at a shareholder meeting in July.