In a move that is expected to unlock value for shareholders, Vodafone Group Plc. (LON:VOD) said on Friday that it would spin off its tower business operations in Europe into a new company that would eventually be listed on European bourses.
According to the firm’s chief executive, Nick Read, the tower company comprising of 61,700 sites, which is the largest in Europe, would be functioning within the next 18 months with 75% of its operations spread across Germany, Britain, Italy and Spain.
The world’s second-largest mobile operator announced the spinoff plans against the backdrop of its first-quarter earnings in which the company reported a smaller than expected revenue decline of 0.2%. While the company said that it would gradually improve on its weak top line, the firm maintained its full-year guidance for adjusted core earnings and free cash flow.
Vodafone’s spinoff announcement received a thumbs-up from investors with the company’s shares soaring more than 10% on Friday, the biggest intra-day surge since November 2008. At noon in London, the stock was trading at 144.5p, up 9.5% for the session.
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