Vodafone Group plc (LON:VOD) wins this battle... but will it win the war?
Vodafone (LSE: VOD) (NASDAQ: VOD.US) has drawn first blood in the ongoing saga with Verizon Communications (NYSE: VZ.US) over the ownership of Verizon Wireless, after the US telecoms Goliath relented after claiming initially that Wireless's dividend payout was not assured this year.
Instead, today saw the Verizon Wireless board approve a dividend payment to the tune of £4.6bn, of which Vodafone will receive £2.1bn as a 45% stakeholder in the company, with the remaining £2.5bn heading to Verizon.
Previously, Verizon CEO Lowell McAdam had said that the top priority for Wireless is to pay down $5bn worth of debt, due between now and mid-2014, in a move widely recognised as an attempt to force Vodafone's hand into selling its interest in Wireless.
However, to reference Owain Bennallack's analogy of these negotiations as a poker game, it appears that Verizon has failed with this bluff and folded on this particular round, with other Fools recognising that Verizon needs the dividends as much as Vodafone.
The dividend will be paid out by the end of June 2013, and Vodafone management confirmed that it will provide an update on its plans on how best to utilise this dividend within its preliminary results, due on 21 May. Whether it will be paid in the form of a special dividend, or to buy back shares, will interest shareholders hugely.
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> Sam owns share in Vodafone. The Motley Fool has recommended shares in Vodafone.