for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Vodafone says to keep Verizon stake

A visitor walks in front of the Vodafone stand during the 3GSM World Congress at the Feria of Barcelona, in central Barcelona February 12, 2007. Mobile phone giant Vodafone said on Wednesday it had decided not to sell part of its 45 percent stake in fast-growing U.S. cell phone joint venture Verizon Wireless.REUTERS/Gustau Nacarino

LONDON (Reuters) - Cell phone giant Vodafone Group Plc VOD.L said on Wednesday it had decided not to sell part of its 45 percent stake in fast-growing U.S. cell phone joint venture Verizon Wireless.

Vodafone, the world’s second-largest cell phone company by customers, had until Thursday to exercise a put option and sell up to $10 billion worth of its stake in Verizon Wireless, which analysts have valued at around $45 billion.

Vodafone shareholders have been frustrated that the value of Verizon Wireless, which is controlled by U.S. telecoms heavyweight Verizon Communications VZ.N, is not fully reflected in Vodafone's share price and that the unit is not expected to reinstate dividend payments until at least 2009.

But company investors last month overwhelmingly rejected calls by a small activist shareholder, Efficient Capital Structures (ECS), for Vodafone to spin off the stake into a separately listed company.

Some analysts have argued any partial sale of the stake would trigger market expectations of a full sell-out, hand control of the stake’s valuation to independent investment banks and hamper Vodafone’s bargaining position for any later deal.

Vodafone Chief Executive Arun Sarin has said only that the British-based company is examining all options in the United States, which contributes well over 20 percent of the firm’s underlying group operating profit.

Verizon Communications, the second-largest U.S. telecoms operator, has long voiced its willingness to buy out Vodafone.

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up