Verizon Wireless (VZ, VOD) declares a $10B special distribution. Verizon shareholders - a 55%...


Verizon Wireless (VZ, VOD) declares a $10B special distribution. Verizon shareholders - a 55% owner in the joint partnership - will receive $5.5B to be paid on January 31, 2012. Vodafone will receive $4.5B, and has declared a £2B special dividend payable to its shareholders as well. VZ +0.8%, VOD +5% AH.

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Comments (11)
  • Ed's perspective
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    booyah!
    29 Jul 2011, 09:04 AM Reply Like
  • UltraLong
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    So now the market starts factoring in the fact that VOD owns 45% stake in VZ. Suddenly that's worth something ;-)
    29 Jul 2011, 03:57 PM Reply Like
  • smallcapALPHA
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    ummmm idk if im missing something but why is verizon paying vodafone a 10 billion dividend? is it just because they havent payed them since like 05 i believe it is
    30 Jul 2011, 08:37 AM Reply Like
  • Energysystems
    , contributor
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    Verizon Wireless is a joint venture between VZ and VOD. Back in 2005 it was decided that instead of paying a dividend, focus would be on eliminating the debt that Verizon Wireless division held. The debt will be cleared at the end of this year(finally), and dividends will resume. I expect this "special" dividend to be an annual occurance going forward. VOD is receiving 45% of the 10 billion, for their 45% ownership stake in Verizon Wireless.
    31 Jul 2011, 04:55 PM Reply Like
  • smallcapALPHA
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    so its a joint venture and VOD made a deal to not get a dividend until VZ payed off its debt and now VZ is gonna start paying them a dividend again
    1 Aug 2011, 04:09 PM Reply Like
  • Energysystems
    , contributor
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    No dividend until Verizon Wireless's debt was paid down(There was debt created/assumed when the joint venture started). Not the debt of the parent company(ies). From what it looks like, this will be an annual dividend payment, from Verizon Wireless to VZ/VOD.
    3 Aug 2011, 12:20 PM Reply Like
  • Ed's perspective
    , contributor
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    Energysystems

     

    Want to understand your comment VERY clearly:

     

    Are you stating that when the "debt" is repaid via the dividend, there is an agreement ( tacit or explicit ?) that VOD will go away and NOT expect further cash distributions?

     

    This is contrary to my thinking and almost unconscionable if it has been agreed to by these parties / boards and NOT disclosed.
    2 Aug 2011, 06:05 PM Reply Like
  • smallcapALPHA
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    oh sorry i meant to put a question mark at the end of my last comment . IDK what is gonna happen i would like someyone to tel me if they know or have evidence of there theory
    2 Aug 2011, 06:55 PM Reply Like
  • Energysystems
    , contributor
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    No. I'm saying VOD is expecting an annual dividend NOW that the debt of Verizon Wireless has been taken care of.
    3 Aug 2011, 12:21 PM Reply Like
  • smallcapALPHA
    , contributor
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    ok so can verizon purchase VOD shares back from them now to lessen the dividend they get or is this set in stone
    3 Aug 2011, 07:57 PM Reply Like
  • Energysystems
    , contributor
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    In theory, yes Verizon could purchase VODs' share in Verizon Wireless. In fact, many execs from Verizon have spoken that they'd like to do that. But I don't see VOD selling, and many analysts have said it'd cost VZ over 100 billion to buyout VOD. I don't see that happening. I think it'll continue to be a partnership that benefits both companies.
    4 Aug 2011, 03:50 PM Reply Like
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