Vodafone seeks quick bid decision
Andrew Lorenz
EXPERTS believe Vodafone AirTouch may this week set out a truncated timetable for its record-breaking near-œ90 billion bid for Mannesmann.
Vodafone will publish its offer document later this week, and it may seek to set a deadline for acceptances well short of the 60-day limit allowed under German takeover rules.
Such a strategy would reduce the risk to Vodafone that its strong share price, which has pushed up the value of its offer, might weaken.
But the strategy could be undermined if the European commission follows its initial month-long inquiry with a full, "second stage" investigation of the bid. That would take a further four months and Mannesmann investors would be unlikely to commit their shares to Vodafone without knowing the outcome.
Vodafone is facing difficulties on another front. British Telecommunications, its partner in the AirTel mobile consortium in Spain, is exerting its equal rights to the near-œ4 billion Banco Santander shareholding in the grouping.
Vodafone wants to buy the Santander holding and take its stake to 51%, but BT stands in its way and delicate negotiations are likely before a resolution can be found. One solution may be for each British operator to take part of the Santander holding, but the situation will not become clearer until the new year.
Vodafone's most immediate concern will be to advance its attack on Mannesmann. Its offer document could waive some of the conditions the company at first attached to its bid, such as the stipulation that the bid would lapse if the commission launched a second-stage inquiry.
Klaus Esser, Mannesmann's executive chairman, launched a pre-emptive strike against the imminent document. He said the offer stood no chance of success unless it was increased. "From Mannesmann shareholders' perspective, it would be a weak offer if it is an unchanged offer," he said.
Chris Gent, Vodafone's chief executive, has stated repeatedly that the bid will not be increased. He has been encouraged by the strong rise in Vodafone's price since the offer was announced.
Mannesmann's share price has also risen. Esser said: "The critical question is to what extent the share price is fundamentally supported and to what degree it is dependent on the bid speculation. I think a very large degree of what we are seeing [in the increased share price] is the result of a significant re-rating of our shares over the last couple of weeks as we have explained our data and integrated networks strategy."
Mannesmann was now seen as being at the forefront of the data communications wave, along with Japan's mobile operator DoCoMo, he said.
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