Vodafone targets Mannesmann
By Neil Bennett and Mary Fagan-The Telegraph
VODAFONE Airtouch, the UK's largest mobile communications group, is holding talks with France Telecom about a joint œ45bn hostile bid for Mannesmann of Germany, which has agreed a œ19bn takeover of Orange, the British mobile phone company.
Vodafone's broker, Warburg Dillon Read, has been sounding out Vodafone's investors' sentiment about a hostile move. If they decide to bid, Vodafone would acquire Mannesmann's continental European mobile phone assets and France Telecom would take Orange. Bankers at Goldman Sachs, Vodafone's main adviser, were said to be meeting yesterday in the bank's Fleet Street headquarters to work on the details of a bid. Goldman is also said to have been canvassing views about a bid.
A takeover of Mannesmann would be fraught with legal difficulties. The company's regulations prevent any of its shareholders controlling more than 5 per cent of the votes. This means that even if Vodafone and France Telecom acquired a majority stake they would still not have control.
The two groups may be forced to launch a lengthy legal action to take control. Alternatively, they could hope to rely on Mannesmann's shareholders, who could vote at a special meeting to scrap the limitations.
The takeover of Orange, announced last month, was widely seen as a defensive move by Mannesmann and drew sharp criticism from the German group's investors over the price to be paid for the UK company. But by the time the move was announced, Mannesmann had secured the agreement of Hutchison Whampoa, which owns 44 per cent of Orange.
One analyst said: "This is the time to do it, to exploit the anger of Mannesmann's shareholders who are angry about how much they are prepared to pay for Orange. With the offer document for Orange now out, Mannesmann is unable to alter the offer." Klaus Esser, Mannesmann's chairman, admitted in a recent interview with The Telegraph that the takeover of Orange made the enlarged group an attractive takeover target.
Mannesmann would be a rich prize for Vodafone. An acquisition would give the British company control of D2 in Germany and Omnitel in Italy, two of Europe's most successful mobile phone companies. This would cement Vodafone's position as the world's largest mobile phone operator, a role it grabbed with the acquisition of Airtouch at the start of the year.
Meanwhile, with the acquisition of Orange, France Telecom would emerge as one of Britain's largest telecoms groups. It recently bought a 25 per cent stake in NTL, the country's leading cable group. In turn, this enabled NTL to buy the cable assets of Cable & Wireless. France Telecom is also in the process of acquiring control of E-Plus, the German mobile phone network, by buying stakes from Vodafone, Veba and RWE.
Vodafone and France Telecom would sell Mannesmann's remaining engineering businesses, which Mannesmann has already announced the intention to demerge in 2001. Mannesmann's shares leapt more than 8 per cent in Frankfurt on Friday, as dealers became aware that Vodafone's intentions were serious. Orange shares also rose almost 5 per cent. Until now Mannesmann's share price has been depressed as investors have vented their anger on the group's high priced acquisition of Orange.
|
