The Swedish group Telia has wasted little time in unloading some of the Vodafone shares it received for its 14 per cent stake in Eircell. Telia disclosed yesterday that it sold 80 million Vodafone shares for £129 million sterling (#207 million).

It is understood that Telia sold the 80 million Vodafone shares to ABN Amro at 161p sterling a share and that ABN was attempting to place the shares in the market during yesterday's session in London. The sale by Telia came after the expiry of its lock-up period on June 11th and dealers expect Telia to sell the remaining 66.5 million shares at an early date.

Vodafone shares closed up 1/2p at 162p sterling on the London market, almost two-thirds of their value when the sale of Eircell was first confirmed last December and a fall of about 18p since the deal was completed last month.

The sale of the 80 million Vodafone shares held by Telia will go a small way towards reducing the share overhang which follows Vodafone's series of acquisitions over the past year, where it used its own shares as currency. As well as the remaining 66.5 million shares held by Telia, there are 220 million Vodafone shares held by former Eircell shareholder KPN and these are expected to be sold as soon as KPN believes it can get a reasonable price. Other investors which are expected to sell large amounts of Vodafone shares in the coming months are the Spanish banking group BCSH and telecoms group Hutchison Whampoa.

Analysts believe that the overhang in Vodafone extends to 3.6 billion shares, or 5 per cent of the total issued shares, which are currently worth some £5.5 billion sterling. Until this overhang is eliminated, the short-term prospects for the Vodafone shares now held by 450,000 Irish former Eircell shareholders are poor.

Last month, Vodafone chief executive Sir Chris Gent said he did not foresee Vodafone making any more acquisitions using shares at the time. He said he expected the shares overhanging the market to "disappear" over the next few months.