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Last Updated: Wednesday, 8 August 2007, 13:09 GMT 14:09 UK
Vodafone hangs onto Verizon stake
Vodafone sign
Most Vodafone shareholders wanted to keep hold of Verizon Wireless
Mobile phone firm Vodafone has opted not to sell part of its 45% share in its US joint venture, Verizon Wireless.

The firm had until Thursday to sell up to $10bn (4.9bn) shares in the rapidly growing firm to Verizon Communications.

"Retaining its full 45% interest is in the best interest of shareholders," the firm announced on Wednesday.

Last month, shareholders overwhelmingly voted to keep the stake after one stakeholder favoured spinning off Verizon Wireless.

'Growth prospects'

In July, rebel shareholder Efficient Capital Structures (ECS) had proposed that the firm sell off the stake and turn it into a separately listed firm.

But other shareholders - who see strong potential for Verizon over the longer term - opposed the suggestion.

"Verizon Wireless is a market-leading business with strong growth prospects," said the firm, after opting not to exercise its rights to sell part of its Verizon Wireless stake.

High levels of debt mean Verizon Wireless is not expected to return to paying a dividend until 2009 or later.

But some analysts have speculated that if the firm were to sell any of its stake in Verizon Wireless, this could lead to a more complete sale longer term - which in turn might hamper Vodafone's ability to bargain for future deals.

In total Vodafone's stake in the wireless firm is estimated to be about $45bn.

Verizon Communications owns the other 55% of Verizon Wireless.

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