The largest US mobile service provider, Verizon Wireless, announced Monday that it would be paying its parent firms Verizon Communications and Vodafone Group Plc dividends totalling US$7 billion in June of this year. This comes as a surprise to industry analysts who were not expecting a payout as large as this.
The dividend announcement comes amidst speculation that Verizon would be buying out Vodafone from their joint venture once they come to an agreement as to a price. Reuters previously reported back in April 24 that Verizon was putting together a US$100 billion bid for the remaining stake. Investors though are expecting Vodafone to seek a much higher price.
The dividend decision comes after comments by Verizon Chief Executive Lowell McAdam to JP Morgan analysts saying he did not want 'to pay a premium for the stake' and that the two companies are facing a 'lean' year in terms of a dividend from the joint venture.
Verizon declined to make any comment on the Verizon Wireless announcement and was the same tact by Vodafone. Verizon Communications controls the wireless venture and decisions on dividends.
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