Vodafone will receive no dividend from its stake in Verizon Wireless until 2012 at the earliest after the US wireless carrier’s $28bn acquisition of rival Alltel but the deal will “significantly increase” the investment’s value, the UK group said. Just three months ago, Vodafone said it expected dividends by the end of 2009, four years after it last received a £923m payment from Verizon Wireless. The absence of cash returns from the 45% stake has riled some investors. But Arun Sarin, outgoing chief executive, said Vodafone’s Alltel acquisition would “clearly enhance” the value of its holding, estimated at $60bn-$70bn. TPG and the private equity arm of Goldman Sachs, which beat Verizon Wireless in last year’s auction, will earn $1.3bn on investments they made just seven months ago in Alltel. The deal is a good one, says Lex, “but it was not supposed to be this way”.

This entry was posted by Gwen Robinson on Friday, June 6th, 2008 at 5:39 and is filed under Capital markets, M&A, People. Tagged with alltel, verizon, vodafone. Edit this entry.