Vodafone, the world's largest mobile phone company, yesterday denied reports that it was mulling a £78.6m takeover bid for US telecoms giant Verizon Communications.
The report, which originated on the Financial Times' FT Alphaville blog, triggered a 12.5% jump in Verizon's share price in pre-market trade.
Ironically, Vodafone and Verizon have joint ownership of Verizon Wireless, the second-largest mobile provider in the US, and Vodafone has come under pressure from some investors in the past to sell its 45% stake in Verizon Wireless.
Nonetheless, while Verizon has said it is interested in taking full ownership of the profitable mobile services asset, Vodafone yesterday insisted it had no intention of offloading its stake.
The company, in a brief statement yesterday, said: "Vodafone wishes to make it clear that it has no plans to make such an offer."
Verizon declined to comment.
Meanwhile, Vodafone will hold its annual meeting next week and protests are anticipated - particularly from activist investment group ECS Assets, which is pushing Vodafone to free up as much as £38bn from its assets to return to shareholders Vodafone shares yesterday trimmed their earlier losses to trade down 1p to 162.25p In the US, Verizon Wireless competes against AT&T, which took full ownership of its wireless division, formerly known as Cingular, after buying partner BellSouth, late last year.
Earlier this year, ECS Assets said it had drawn up four resolutions to be put to Vodafone's annual meeting on July 24. The resolutions include giving Vodafone investors shares reflecting the group's interest in Verizon Wireless, and bonds worth £34bn, or 65p a share.
ECS said in a statement: "Vodafone's share price has underperformed the FTSE-100 over the past five years by 28%. A major reason for this is Vodafone's inefficient capital structure.
"Our resolutions aim to rectify that, recognising the long-term quality of earnings of the company."
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