Vodafone rebels win support in US

Rebel Vodafone shareholders demanding a shake up of the operator’s capital structure are understood to have made some headway with their demands in the US.

US-based shareholder advisory group, Glass Lewis, is believed to have recommended that US investors in Vodafone lend their backing to the majority of the proposals submitted by activist investment group Efficient Capital Structures (ECS).

The move comes as the deadline for the carrier’s annual meeting approaches. Vodafone is required to put the resolutions to its shareholders at its forthcoming AGM on July 24.

ECS, which is backed John Mayo, former deputy chief executive of Marconi, claims that the carrier’s shares have performed badly over recent years and contends that the operator’s market valuation does not reflect the real underlying value of the company.

The resolutions, if passed, would give Vodafone investors bonds worth £34bn and would see the spin off of the carrier’s 45 per cent interest in Verizon Wireless.

About a third of Vodafone’s shareholders are understood to be based in the US, with a vast majority subscribing to Glass Lewis.

However, in the UK, the proposals have met with mixed reactions. Some question the credibility and motives of ECS, specifically those of one of the firm’s key backers John Mayo, former deputy chief executive of Marconi. It was Mayo after all, who decided to load up GEC-Marconi with debt, flog its cashcow defence interests and hand out the cash pile to the shareholders.