Vodafone defeats rebel shareholders

Mobile phone giant Vodafone today defeated plans by rebel shareholders seeking a radical overhaul of the company.

Activist shareholder group Efficient Capital Structures (ECS), which includes former Marconi finance director John Mayo, were calling for Vodafone to spin off its 45% stake in US firm Verizon Wireless and load up the company with an extra £34bn (€50.66bn) in debt to return more cash to investors.

The group used a clause in the Companies Act to get its proposals onto the agenda at today’s annual meeting but its resolutions were comfortably defeated by proxy voters.

More than 93% of shareholders voted against ECS’s plans to spin off or issue tracking shares in Verizon Wireless, while nearly 95% came down against the bond issue.

Vodafone chairman John Bond criticised the “extraordinary” level of debt which Vodafone would have to take on under the bond issue, which would increase the firm’s interest payments by around £2bn (€3bn) a year and limit the Board’s flexibility.

Chief executive Arun Sarin also praised Verizon Wireless’s double-digit growth and added: “We see a great future for the business.”

No representative from ECS spoke at the meeting, where shareholders present were vocal in their opposition to the plan.

Investor Patrick Evershed told the Board: “All of us think he (Mayo) is wasting your time. He has distracted your attention and I can only believe he is undermining the company.”