Activism

Call for Vodafone restructuring

Vodafone has received a list of shareholder resolutions from Efficient Capital Structures (ECS) which seek actions concerning a potential restructuring to be put to investors at July’s AGM.

The resolutions include plans for Vodafone to increase the amount of debt on its balance sheet in order to allow it to return more cash to shareholders, and to give Vodafone investors shares reflecting the company’s 45% stake in US firm Verizon Wireless. Glenn Cooper, ECS chairman, estimated the proposals would release between £17bn and £38bn of shareholder value.

The Independent’s Jeremy Warner (8 June) suggested John Mayo’s involvement with the activist investors “is almost as laughable as the proposals themselves”. Mayo, said Warner, presided over a massive destruction of shareholder value while deputy chief executive of Marconi, squandering Lord Weinstock’s cash mountain on a series of fly-by-night telecom and internet acquisitions.

Warner said it therefore seems a bit of a cheek for Mayo to be lecturing Arun Sarin, Vodafone chief executive, on how to run a company. Furthermore, said Warner, leveraging the company with another £34bn of debt would make Vodafone the most indebted firm in the world.

July 2007