Verizon Agrees to Settle Suit Over Vodafone Stake PurchaseChris Dolmetsch
Verizon Communications Inc. agreed to settle a lawsuit by a shareholder who sought to stop its purchase of Vodafone Group Plc’s stake in Verizon Wireless for $130 billion, according to a court filling.
Investor Natalie Gordon sued Verizon Communications in New York state Supreme Court in Manhattan in September, seeking to block the company’s acquisition of Vodafone’s 45 percent stake in their Verizon Wireless joint venture.
The parties have entered into a memorandum of understanding dated Dec. 6 to settle the action, Verizon said in a court filing dated yesterday. The agreement is subject to the court’s approval, according to the filing.
Verizon has scheduled a shareholder meeting for Jan. 28 to vote on the acquisition. The company will ask investors to approve the issuance of as many as 1.28 billion shares to complete the deal, New York-based Verizon said yesterday in a Dec. 6 regulatory filing. It has said it expects to close the deal by the first quarter of next year.
The company is seeking full control of the unit on a bet that U.S. consumers’ increasing use of smartphones and tablet computers will fuel greater demand for wireless data services. The transaction will wind down a 14-year partnership with Vodafone to operate the largest and most profitable mobile-phone carrier in the U.S.
Verizon announced the deal to buy out Vodafone’s 45 percent stake in the joint venture in September. To help fund the purchase, Verizon sold $49 billion in bonds -- the biggest company debt offering ever.
By owning 100 percent of Verizon Wireless, the parent company will keep all of the earnings and get more leeway to upgrade its mobile network. Newbury, England-based Vodafone has said it will use part of the proceeds from the merger to invest in its own network.
The case is Gordon v. Verizon Communications Inc., 653084/2013, New York State Supreme Court, New York County (Manhattan).