Vodafone may sell Verizon stake

Vodafone is up 3.7% this morning after confirming it is in talks to sell its minority stake in Verizon Wireless.

There appears to be a strong chance that Vodafone will sell its 45% stake in Verizon Wireless to Verizon's parent company Verizon Communications, for $130 billion. If the deal does go ahead it would be one of the biggest in corporate history.

Investors believe that Vodafone could return a large portion of the cash from the transaction to shareholders in the form of a special dividend. Public limited companies usually pay two dividends a year, an interim and final dividend, but in unusual circumstances such as the disposal of an asset, a firm may pay a special dividend. 

Traders have been buying Vodafone as they feel the deal will go ahead. Vodafone’s European operations have been hit by a slowdown in the region and its stake in Verizon is one of its more profitable businesses, so it may prove to be a short-term gain but long-term loss for Vodafone.

Vodafone Group plc (DFB) chart

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