Vodafone shares top London

Vodafone PLC's shares topped the FTSE 100 index Friday following the long-awaited news that it will receive a GBP2.8 billion dividend from U.S. mobile giant Verizon Wireless, and will return the bulk to shareholders. Vodafone--which holds a 45% stake in Verizon Wireless with the rest owned by Verizon Communications Inc.--hasn't received a dividend from its U.S. investment since 2005 and investors had been getting restless."The dividend from Verizon Wireless allows us not only to reward our own shareholders with an immediate and sizeable cash return, but also to continue to reinvest in our business to improve our customers' experience, further strengthen our competitive position and create additional value for shareholders," Vodafone Chief Executive Vittorio Colao said in a statement. The dividend news, which came sooner than some telecom analysts had expected, was well received with Vodafone shares up 8 pence, or 5%, at 174 pence in a lower London market.Deutsche Bank Friday raised its target price to 225 pence from 215 pence on Vodafone on the back of the dividend news, which they said "bodes well for future cash returns to Vodafone and should partly eliminate the U.S. asset discount implicit in Vodafone's share price."Colao and his team can now turn their full attention to resolving a disputed tax bill with the Indian authorities after recently completing a year-long campaign of shedding minority holdings in Asia and Europe.Vodafone, the world's biggest mobile operator by revenue, is fighting Indian tax authorities over a demand for up to $2.5 billion related to the company's 2007 $11.2 billion purchase of Hutchison Whampoa Ltd.'s stake in what is now Vodafone Essar, a joint venture with the Essar Group industrial house.Verizon Wireless' board approved the payment late Thursday of a GBP6.1 billion dividend, of which Vodafone will receive GBP2.8 billion. Verizon Wireless, which hasn't paid a dividend for years preferring instead to use the money to cut its debt, will pay the dividend on Jan. 31, 2012.Vodafone will than pay a special dividend of GBP2.0 billion, equivalent to 4.0 pence a share, to its shareholders in February 2012. Further details about the dividend timetable will be released with its interim results on Nov. 8. The remainder of the money will be used to pay down its net debt, which stood at GBP23.1 billion at the end of June.Vodafone last Friday posted robust first quarter revenue as improving trends across Northern Europe and strong performances in India and Turkey offset continued weakness in southern Europe.

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