British wireless operator Vodafone Group has instituted a major reorganization that appears to signal a sale of the companys 45-percent stake in U.S.-based Verizon Wireless a move that would delight Vodafone shareholders hungry for dividends and a more streamlined business model.
The changes further indicate a turnaround from three years ago, when Vodafone insisted it would not get rid of its piece of Verizon Wireless. Vodafone has not received a dividend from Verizon Wireless since 2005.
On Thursday, Vodafone put all of the minority stakes it holds in other service providers Verizon Wireless, Frances SFR SA, Polands Polkomtel SA and more into one unit that will be run apart from the rest of the carrier. Vodafone CEO Vittorio Colao has made no bones about wanting to give investors more value through share buy-backs, dividends and other financial initiatives, and, through this restructuring, looks to be on his way to doing just that.
The focus, then, turns to Vodafones 45 percent Verizon Wireless stake. Who would buy it? Most likely, majority owner Verizon Communications Inc. However, the Wall Street Journal pointed out that Vodafone and Verizon could end up merging. Similar talk popped up earlier this year but nothing has yet come of it. Vodafone also could hold off on making any big changes until 2012, the year Verizon hopes to once again issue dividends.
Vodafone may want to wait on a Verizon Wireless sale anyway: the company stands to take a giant tax hit if it sheds its Verizon Wireless holdings.
All told, Vodafone owns about $65 billion worth of minority stakes in other mobile carriers.
Shares of Vodafone were trading .24 percent lower by about 12:25 p.m. Eastern, while Verizon stock had fallen .06 percent.