Vodafone shareholders to vote on US future

24-07-2007

Vodafone shareholders to vote on US future
Vodafone shareholders are today expected to reject proposals by a rebel investor who is pressing the company to sell off its 45 per cent stake in US mobile operator Verizon Wireless.

Efficient Capital Structures (ECS), an investment group backed by former Marconi boss John Mayo, is seeking to force Vodafone to rethink its American operations.

The activist shareholder has tabled four resolutions for consideration at Vodafone's annual general meeting in order to get the mobile phone provider to revise its US strategy and return more money to investors.

Proposals to be considered at today's meeting include a recommendation that Vodafone sell its stake in Verizon Wireless and lever up its balance sheet by issuing new bonds as part of efforts to get the company to return £38 billion to shareholders.

However Vodafone is expected to highlight that the US business continues to grow rapidly and will return to paying a dividend after it has paid its debts.

Analysts say today's vote comes at a crucial time, with Vodafone having until August 9th to decide whether to exercise an option to sell up to $10 billion (£5 billion) worth of Verizon Wireless shares to Verizon Communications, which owns the remaining 55 per cent of the US mobile operator.

Reports suggest that ECS, which holds only 200,000 shares in Vodafone, has gained support from fellow investors who collectively own a ten per cent stake in the mobile phone giant.

Speaking ahead of today's meeting ECS chairman Glenn Cooper said that the investment group's proposals were unlikely to receive backing from shareholders if Vodafone bosses had agreed to change the company's US strategy during negotiations with investors.

"If they have been successful, and I believe they may have been, in striking that deal with shareholders, then I would concede we are unlikely to get a majority for that resolution," he told the Financial Times.



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