Verizon Stiffs Vodafone

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Vodafone (VOD) had some shareholders who wanted the company to sell part of its stake in Verizon Wireless back to majority owner Verizon (VZ). VOD management made the argument that the wireless operation was too valuable to sell now. And, there was the chance of a fat dividend in 2009. A nice little benefit for VOD’s balance sheet.

Well, according to the FT, that won’t happen. It now looks like the first payment will be 2010. As the paper writes "The likely slippage to 2010 or later could fuel tension". VZ would rather use cash to pay down the wireless JV’s debt. But, VOD said “We remain of the view that dividend payments will resume in calendar year 2009."

It looks like Vodafone will have a couple of unhappy years.

Douglas A. McIntyre