Irish investors in Verizon offered low-cost deal

Thousands of Irish shareholders in US telecoms group Verizon are being advised to consider selling their shares.

More than 200,000 Irish people who acquired shares in the US company as part of the Vodafone return of value in March 2014 have held on to them since.

The shares were issued as part of Vodafone’s “return of value” to shareholders following the sale of its US business to its partner Verizon. The return of value involved a cash payment and a number of Verizon shares, depending on the size of the original Vodafone holding.

Most of the Irish shareholders are people who originally invested in the flotation of Telecom Éireann, now called Eir.

Their Vodafone holdings are modest and most received just a handful of Verizon shares, which they immediately sold under a special arrangement put in place by Vodafone and Verizon at the time.

202,000 shareholders

However, Verizon is now writing to the 202,000 Irish people holding Verizon shares to notify them that it intends to move their shares from a UK nominee account set up at the time of the Vodafone deal to facilitate British and Irish investors to a Direct Registration System in the

United States

.

The letters shareholders will receive from today state that this will mean sharply increased trading costs as well as currency exchange and tax issues.

Close to 48,000 of the Irish shareholders hold just one Verizon share and almost 100,000 hold fewer than three. Seventy-two per cent of Irish holdings amount to 10 shares or fewer.

Recognising that it makes no economic sense for many of the Irish shareholders to operate through the US system, Verizon is offering a low-cost dealing option for people who now wish to sell the shares. which are trading just under the $47 mark – about €42.65 a share.

At the moment, the shares held in the UK can be traded for 1 per cent of the value of the transaction, with a minimum of £20 for internet trading and £25 for phone trading.

Once in the US, trades will carry a charge of between $15 and $25 a sale, plus 12 US cents per share sold.

Recognising that moving to the US makes no sense for the majority of Irish Verizon shareholders, the company is offering to sell the shares at a special rate of 0.5 per cent of the value of the trade, with a minimum charge of €17.

The low-cost dealing option is available between November 10th and February 17th of next year.

The company said it would trade the shares in batches twice a week between those dates, on a Tuesday and a Thursday.

Low-cost option

Irish investors looking to avail of the low-cost selling option can instruct the company through a business reply envelope, which will be included with the letters currently on the way to investors.

Unlike the Vodafone transaction, when these envelopes were sent to Bristol in England and many were lost, Verizon and Computershare will use the Irish office of Computershare at Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, for this exercise.