Corporate News Blog - Vodafone Partially Divests its Stake in Vodacom
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LONDON, UK / ACCESSWIRE / September 8, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Vodafone Group PLC (NASDAQ: VOD) ("Vodafone"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=VOD. The Company announced on September 06, 2017, that it had sold its stake in its South African subsidiary Vodacom by 5.2%, resulting in the African mobile firm's share price sinking by more than 6%. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Objective to Ensure Vodacom's Meets Minimum Free Float Requirement
Commenting on the sale agreement, Vodafone stated that following Vodacom's recent acquisition of a 35% interest in Safaricom, Vodafone increased its ownership in Vodacom from 65.0% to 69.7% and at the time of the announcement it was expected that Vodacom's free float would decline to 18%. As part of the Safaricom Transaction, Vodafone therefore committed to Vodacom that it would sell down a sufficient number of shares to ensure that Vodacom will meet the 20% minimum free float requirement on the Johannesburg Stock Exchange.
Insights of the Deal
Vodafone sold an aggregate of 90 million ordinary shares for 14.85 billion rand ($1.15 billion) at a price of 165 rand per ordinary share to institutional investors in a private placement, compared to Vodacom's closing price of 178.30 rand.
After the completion of the transaction, Vodafone's shareholding in Vodacom will reduce from 69.7% to 64.5%.
Vodafone intended to consolidate its African holdings by selling most of its holding in Kenya's Safaricom to Vodacom, in exchange for a larger stake in the latter.
Vodafone remains committed to Vodacom and is likely to retain a controlling majority shareholding in Vodacom for the long-term.
The deal resulted in forcing the proportion of Vodacom's shares that are traded on the Johannesburg Security Exchange (JSE), below the JSE's minimum threshold of 20%.
Vodafone Transferred 35% Interest in Safaricom to Vodacom in Exchange of New Ordinary Shares in Vodacom
As per the news release, on May 15, 2017, Vodafone transferred part of its indirect shareholding in Safaricom to Vodacom. Based on the agreed terms of the transaction, Vodafone exchanged a 35% indirect interest in Safaricom for 226.8 million new ordinary Vodacom's shares. The transaction, which had a value of €2,361 million, increased Vodafone's ownership in Vodacom from 65% to 70%. Vodafone continues to hold a 5% indirect interest in Safaricom following the transfer, in addition to the indirect interest held through Vodacom.
About Vodafone Group PLC
Vodafone Group is one of the world's largest telecommunications companies providing a wide range of services including voice, messaging and data across mobile and fixed networks. Headquartered in London, United Kingdom, the Company predominantly operates services in the regions of Asia, Africa, Europe, and Oceania.
About Vodacom
Founded in 1994, Vodacom is a leading African communications company providing communication services, including mobile voice, messaging, data, financial, and converged services to 69.3 million customers. From its roots in South Africa, the Company has grown its mobile network business to include operations in Tanzania, the DRC, Mozambique, Lesotho, and Kenya. Vodacom is majority owned by Vodafone.
Last Close Stock Review
On Thursday, September 07, 2017, the stock closed the trading session at $28.48, slightly down 0.14% from its previous closing price of $28.52. A total volume of 2.91 million shares have exchanged hands, which was higher than the 3-month average volume of 2.81 million shares. Vodafone's stock price surged 13.06% in the past six months. Furthermore, since the start of the year, shares of the Company have rallied 16.58%. The stock has a dividend yield of 5.72%. At Thursday's closing price, the stock's net capitalization stands at $73.31 billion.
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