Hutchison Says It Supports Mannesmann Rejection of Vodafone Takeover Offer
By Biddy Chan
Hutchison Supports Mannesmann's Rejection on Vodafone (Update1)
(Adds analyst comment, share prices, background.)
Hong Kong, Nov. 23 (Bloomberg) -- Hutchison Whampoa Ltd., a
Hong Kong company set to become the single largest shareholder of
Mannesmann AG, said it supports a decision by the German
telephone company to reject a hostile takeover bid from Vodafone
AirTouch Plc.
Hutchison will hold 10.1 percent of Mannesmann, Germany's
biggest wireless phone company, as part of an agreement to sell
its control in Orange Plc to Mannesmann. The offer to buy out
Orange became unconditional today after Mannesmann received
acceptances for 74.9 percent of shares in the U.K. mobile phone
company.
``Jointly with Orange, Mannesmann will be an outstanding
company and better positioned than Vodafone for the future
opportunities in the telecom business,' Hutchison's Managing
Director Canning Fok said in a statement.
Mannesmann, which is fighting a hostile takeover bid from
Vodafone, offered to buy Orange for 23.5 billion pounds ($38.1
billion) in stock, cash and assumed debt. It now holds 898.3
million shares, or about 74.9 percent of Orange's share capital.
The figure includes Hutchison's 44.8 percent stake.
Vodafone, the world's largest provider of wireless services,
is offering 131 billion euros ($135 billion) in stock and assumed
debt for Mannesmann in what may be the biggest hostile takeover
ever. The U.K. company raised its offer for Mannesmann last week
by 14 percent to 232 euros a share after an proposal was rejected
by Mannesmann days earlier.
For Hutchison, ``It doesn't really matter whether the
Vodafone bid succeeds or not,' said Alice Leung, an analyst at
Worldsec International Ltd. in Hong Kong. ``The key of the issue
is the market valuation for its stake in Mannesmann.'
Vodafone is concerned it could be left behind as Mannesmann,
which already controls two of Europe's three largest cellular
networks, takes over rival Orange. It was forced to go directly
to Mannesmann shareholders after the German company's chief
executive, Klaus Esser, said any new offer would be unacceptable.
Hutchison said it will hold its stake in Mannesmann for at
least 18 months as part of the agreement to sell Orange to
Mannesmann. The company ``has made clear that it considers its
stake to be a long-term strategic investment,' Fok said.
Hutchison has said it intends to develop a global telecoms
network. The Orange sale has enabled it to quickly expand its
footprint from the U.K. to most parts of Europe.
Goldman, Sachs & Co., Dresdner Kleinwort Benson and HSBC
Holdings Plc advised Orange. Merrill Lynch & Co. and Morgan
Stanley Dean Witter & Co. advised Mannesmann.
Hutchison shares rose 2.6 percent to HK$97.25 in Hong Kong
trading today. The stock surged 27 percent since the Orange sale
was announced one month ago, a move that was followed by
Vodafone's first bid.
Mannesmann shares were recently quoted at 183 euros, down |
