Vodafone rebuff sets up record hostile bid
Monday 15 November 1999
Chris Gent, Vodafone chief executive, flew to Dusseldorf yesterday afternoon for a meeting with Dr Klaus Esser, chairman of Mannesmann, to discuss a 203-euro-a-share offer, in the form of 43.7 Vodafone shares for each Mannessmann share, valuing the company at pounds 66bn. Each company said the other had made the first move.
The deal under discussion involved Vodafone alone, and did not include a pre-sale of Orange to a third party. The talks followed Mannesmann's agreed pounds 20bn bid for Orange.
British Telecom is waiting in the wings to play white knight, enabling Mannesmann to fend off a hostile bid from Vodafone.
Mr Esser rejected previous approaches from Vodafone following the completion of its merger with AirTouch of the US in July, it emerged yesterday. owever, Mannesmann's move on Orange means Vodafone is likely to go hostile. This would almost certainly prompt a bidding war, with the likes of BT and MCI WorldCom, the US giant, entering the fray.
Mannesmann dismissed reports that it had been in discussions with several white knight bidders, including BT, to fend off Vodafone. BT, which competes with Mannesmann via its 45 per cent stake in Germany's Viag Interkom, declined to rule out a merger with Mannesmann following reports that it had courted the company.
Mannesmann's attraction is its controlling stakes in Omnitel Pronto Italia and Mannesmann Mobilfunk, both leading wireless operators.
"Until the outcome of Mr Gent's meeting is known, BT has nothing to add to the equation. BT is not sitting on its hands," said a company source. However, a BT spokesperson said: "Of course we are interested in developing our activities in Europe, but we already have a partner in Germany."
BT may be forced to make a stock exchange announcement if its share price moves up sharply. But Mannesmann defiantly talked up its future as an independent company. "Our strategy has been to have an integrated telecommunications offer, with both fixed-line and mobile. We are quite sure that this is the right strategy," said Manfred Soehnlein, company spokesman. "Our earnings growth is forecast to be over 60 per cent - that's a 100 per cent more than Vodafone's. Our position in Europe will be greatly strengthened by the acquisition of Orange and our strategy is more promising for our shareholders than any other way."
One Mannesmann source said the company's strength in data and fixed-wire telephony meant Vodafone's exclusive focus on wireless technology made it a strategic misfit. However, a Vodafone spokesman said wireless telephony would soon dominate and was central to all telecoms businesses.
Vodafone has received approaches from several parties interested in Orange should it gain Mannesmann. France Telecom is thought to have had discussions with Vodafone last month over a joint bid for Mannesmann, in which it would take control of Orange. A takeover of Mannesmann would require the divestment of Orange if the acquiring company already has a UK mobile phone licence. The huge premium paid for Orange by Mannesmann suggests a re-flotation of the business is unlikely.
Bid speculation sent Mannesmann shares to a record of 188.5 euros on Friday. There has never been a successful hostile takeover bid within Germany, let alone one from a foreign company. Vodafone's offer would be almost entirely a paper bid.
The largest hostile bid in history, worth $82.4bn, was made two weeks ago by Pfizer, the US pharmaceuticals company, for Warner-Lambert.
Vodafone reports interim results tomorrow, while Orange shareholders vote on Mannesmann's takeover next week.
- 1 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Driving while dehydrated can be just as dangerous as drink driving, study suggests
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
- 5 One Direction: Louis Tomlinson launching his own record label, has already 'signed two acts'
Isis video purports to show beheadings and execution at gunpoint of 30 Ethiopian Christians and destruction of churches in Libya
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Professional big game hunter Ian Gibson crushed to death by elephant during hunt
Driving while dehydrated can be just as dangerous as drink driving, study suggests
Ben Affleck asked TV chiefs to hide slave-owning ancestry, new hacked Sony emails published by Wikileaks claim
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...