Massive mobile phone operator Vodafone
For starters, the group called Efficient Capital Structures (ECS) is proposing that voting thresholds be lowered to give shareholders more say in actions to be taken by the board of directors. Specifically, ECS wants to give shareholders the power to approve or shoot down any proposed merger of more than roughly $2 billion by a simple majority vote. The group also submitted requests to spin off Vodafone's 45% interest in Verizon Wireless, which is a partnership between Vodafone and Verizon Communications
The reason is the group's belief that management is not realizing the full potential of the global wireless market. And further, giving shareholders control of the steering wheel would help get the stock price up to what the group considers a fully valued level. But Vodafone quickly and courteously discounted the request for changes, essentially relegating the group to the backseat. The company noted that it continuously looks at a number of options to better position the company, but that the current strategy is solid and in the best interests of shareholders.
Vodafone also cited specific downsides to each resolution, such as a below investment-grade rating if it were to dramatically increase leverage through new bonds. Tracking stocks also have been shown to be a poor way to structure a company, as both AT&T
But with the recently announced acquisition of U.S. wireless provider Alltel
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Fool contributor Dave Mock is a much better driver than a passenger. He owns no shares of companies mentioned here. Alltel is an Income Investor recommendation. David is the author ofThe Qualcomm Equation. The Fool's disclosure policy is not afraid to roll down the window and ask for directions.