Sources on both sides of the Atlantic said senior executives and their advisers were working late into the night on the terms of the acquisition by Vodafone’s joint venture partner, Verizon. If successful, the agreement would be the third biggest corporate deal so far.
Vodafone board members were said to be deliberating on final details, including the precise proportion of cash versus shares. Sources said they expected Verizon to pay half in cash and half in shares, although the situation was fluid.
Sources close to the company said reports that the structure involved pushing proceeds through Luxembourg were wrong. Instead, as reported by The Sunday Telegraph, Vodafone is expected to use the “substantial shareholdings exemption clause” introduced in UK capital gains legislation in 2002 to retain as much as $ 120bn.
Vodafone shareholders are expecting as much as 70pc of the proceeds, a major boost for British fund managers and pension funds. Experts reckon the UK economy could receive a boost of around £30bn if the deal goes through.
The sale would be a coup for Lowell McAdam, chief executive of Verizon, who has managed to bring the deal to the table after years of Vodafone refusing to consider the disposal. Investors in Vodafone, would be delighted if the group’s chief executive, Vittorio Colao, can pull off an attractive deal that minimises tax liabilities.
Shares in Vodafone closed up 1.5 at 206.25p last week, the highest level for nearly a decade, valuing the company at £100bn.
Mr Colao will be under pressure to come up with a fresh plan to use the vast cash windfall – and prove he has neither sold Vodafone’s key asset nor turned the company into a takeover target.