Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Vodafone-Airtouch (NYSE: VOD) -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (2032)	10/22/1999 10:07:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Talking telephone numbers-Financial Times-Lex-10/23 Vodafone AirTouch has been stalking Mannesmann all year. At some point it will have to pounce or watch its prey gallop off into the sunset. But the issue about whether to bid is not simply one of how easy it would be to breach Mannesmann's takeover defences; it is also whether a takeover could create value for Vodafone's shareholders. This is far from obvious. True, a combination between the two companies would create value since their networks fit extremely well. However, to have a chance of succeeding, an unsolicited bid would probably have to be at a premium of about 40 per cent. Given that Mannesmann's pro forma market value after swallowing Orange is just over E70bn (œ45.6bn), that implies a transfer of value of close to E30bn. Moreover, Vodafone might have to budget for a loss of say E3bn on reselling Orange. Vodafone would need to make a compelling case that there is over E30bn in value to be created from combining with Mannesmann. If not, it would end up giving away all the value creation (and more) to Mannesmann shareholders. It would be copying the German company's error in overpaying for Orange