Vodafone to stick with Verizon

Listen to this article

00:00
00:00

Vodafone has no immediate plans to sell its 45 per cent stake in Verizon Wireless, the US mobile phone operator, Verizon Communications said on Tuesday.

Ivan Seidenberg, Verizon Communications’ chief executive, said Arun Sarin, his counterpart at Vodafone, had told him the UK mobile operator was “pleased with their position in the partnership” and would keep a stake in Verizon Wireless “for several years”. The two chief executives met at a Verizon Wireless’ board meeting last week. Mr Seidenberg said they had agreed a long-term growth strategy for the joint venture.

Mr Seidenberg’s comments risk reopening tensions between Vodafone and some of its investors. In January, Standard Life Investments, one of Vodafone’s top 10 investors, called on the company to sell its stake in Verizon Wireless. Last week, Standard Life voted against Mr Sarin’s re-election as chief executive at Vodafone’s annual meeting.

Vodafone declined to comment on Mr Sarin’s discussions with Mr Seidenberg. “Our position on Verizon Wireless remains unchanged,” Vodafone said. “We are very happy to be partners in the business, which continues to perform very well.”

Vodafone’s shares closed down 1.68 per cent at 114.25p in London. Mr Sarin last week told investors there were a “number of reasons” for Vodafone to “stay in the US”.

He noted that analysts estimated Vodafone’s stake in Verizon Wireless, worth $20bn two or three years ago, had “doubled” in value. However, he also said Vodafone’s board would consider offers for the stake and do “what is in the best interests of our shareholders”.

One of Vodafone’s big investors said last night it was disappointed that the company appeared to have ruled out selling its stake quickly.

The shareholder also expressed frustration at what it regarded as mixed messages from the company.

Mr Seidenberg’s comments were made during a conference call with analysts about Verizon Communications’ second quarter results.

Verizon Communications has made no secret of its desire to buy out its minority partner in Verizon Wireless, the second largest US mobile operator, particularly after Cingular Wireless, its arch rival, acquired AT&T Wireless last year. The deal ousted Verizon Wireless from a coveted position as the biggest US mobile operator.

In New York trading on Tuesday, Verizon Communications’ shares were down 1.6 per cent to $33.27.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.