Court throws out Mannesmann bid to bar Goldman

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The Independent Online

Mannesmann, the German telecoms and engineering group, suffered an embarrassing rebuke yesterday when an injunction it sought to bar Goldman Sachs from advising bid predator Vodafone AirTouch was thrown out by the High Court.

Mannesmann, the German telecoms and engineering group, suffered an embarrassing rebuke yesterday when an injunction it sought to bar Goldman Sachs from advising bid predator Vodafone AirTouch was thrown out by the High Court.

The court tussle came as Vodafone directors pondered making a raised £90bn takeover for Mannesmann, a move which could come today. It would be the largest takeover bid ever launched.

The judge, Mr Justice Lightman, said Mannesmann's application was "completely hopeless and must be dismissed," and attacked the company for "totally disgraceful and unacceptable conduct".

The injunction dissolved when preliminary claims filed with the court on Monday in a draft affidavit by Klaus Kinzius, managing director of its Eurokom division, were withdrawn.

The changes occurred on Wednesday when the German executive swore a formal affidavit in Dusseldorf. In the second statement, the German executive, who did not appear in court yesterday, withdrew allegations that he and other Mannesmann executives had met with Goldman and had received assurances that the investment bank would not advise Vodafone in a hostile bid for Mannesmann.

Mr Kinzius acknowledged that he had not witnessed any conversation between Klaus Esser, the Mannesmann chief executive, and Tim Plaut, Goldman's managing director in Frankfurt, but instead had been informed of the alleged conversations by Mr Esser.

"(Mr Kinzius) says that he has now had the opportunity (on Wednesday) to refresh his memory from his diary and that when preparing the first Kingius affidavit he had confused the occasion when confirmation was given by Mr Plaut," said the judge in his ruling. "This a totally unsatisfactory explanation," he added.

The judge further criticised the behaviour of Mr Kinzius."I regard the placing of this evidence before the court as totally disgraceful and unacceptable conduct," he said. "It raised serious questions as to the integrity of Mr Kinzius and the motive for this application."

Mannesmann, which had been advised by Goldman on its buyout of Italy's Omnitel earlier this year, claimed it had received assurances of an ongoing advisory mandate and that the bank had said it would not act in a hostile bid against a client. Goldman maintained there was no ongoing relationship.

Mr Justice Lightman also refused to accept that Goldman had received confidential information about strategy and tax structures from advising Hutchison Whampoa and Orange in the latter's agreed £20bn buyout by Mannesmann last month.

But the judge said the claim was "academic" since Mannesmann provided no evidence of actually providing Goldman with any information. He further observed that Mannesmann itself had brought the information into the public domain by opposing a motion from Goldman to hear the case in private.

"In conclusion, this application is completely hopeless and must be dismissed," the judge said. "It should never have been made." Legal observers said such strident criticism of an application was unusual.

The judge ordered the German company to pay both sets of costs.

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