Vodafone share offer: what should you do?
All Vodafone shareholders should have received letters by today inviting them to vote on the company's planned $130bn deal with US telecoms giant Verizon.
The deal sees Vodafone shrink in size to a European company after it sells its US unit to Verizon. If it goes ahead, it will mean Vodafone's shareholders will get cash and end up owning shares in both Verizon and a smaller Vodafone.
Vodafone will still have operations in Africa and Asia-Pacific after the sale of its Verizon stake. However, if the deal goes ahead, it will mean Vodafone's shareholders will get cash and end up owning shares in both Verizon and a smaller Vodafone."
The deal was agreed last September and Vodafone shareholders must cast their vote to either accept or reject it by January 26. All shareholders are likely to get cash back and Verizon shares if the deal goes ahead as expected.
Vodafone expects to return about a third of the company's value in cash and two-thirds of the value in new Verizon shares. The exact value of the new Verizon shares to be received by shareholders will depend on their market value on the day the shares are issued.
Most analysts described it as a good deal for shareholders. "Shareholders are getting back a wad of cash," one analyst told this newspaper yesterday.
Despite this, analysts warn that the sale of the US part of Vodafone's business could cost shareholders dearly in the future. "There's a lot of pessimism about Vodafone's core business in Europe," said one telecoms expert.
There is speculation that the smaller Vodafone could be taken over by another US telecom giant, AT&T, if the Verizon deal goes through.
This means that shareholders could be in line for another cash payment in the New Year.