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: Chuzzlewit who wrote (2137)	11/22/1999 7:42:00 AM
From: MrGreenJeans	Respond to of 3175

FOCUS-Politics buffet Vodafone, Mannesmann shares (Adds analyst comment, updates shares) By Ben Hirschler LONDON, Nov 22 (Reuters) - Shares in Vodafone AirTouch Plc (quote from Yahoo! UK & Ireland: VOD.L) and its German target Mannesmann AG see-sawed on Monday as investors fretted that political intervention could derail the world's biggest ever hostile takeover. Most analysts believe Vodafone, the world's leading cellphone company, has a better-than-even chance of succeeding in its goal of forging a new European wireless giant, if the issue is left to the market. But repeated comments at the weekend from German Chancellor Gerhard Schroeder that he opposed hostile takeovers -- although stopping short of defending Mannesmann -- represent a wild card. British Prime Minister Tony Blair countered by saying he thought the idea that hostile takeovers destroyed corporate cultures was exaggerated. ``The political situation is intensifying with some pretty strong stuff from Schroeder over the weekend and Blair getting behind Vodafone,' said SG Securities telecoms analyst Jim McCafferty. McCafferty still sees a 70 percent chance of the the deal going through and a Reuters poll of analysts in Germany and Britain on Friday showed that on average they believed Vodafone had a 60 percent chance of success. ``There may be political reasons why it will fall by the wayside -- but in terms of business logic it's almost a no-brainer that this deal should go ahead,' John Moroney of consultants Ovum Ltd told Reuters Television. ARBITRAGEURS ADD TO VOLATILITY Arbitrageurs are fuelling volatility as they take huge positions betting on the outcome on the fight. ``In a mega-bid like this arbitrageurs will be taking vast short-term positions,' said Williams de Broe analyst Nigel Hawkins. ``Mix that in with the currency factor and heavens know what else, and that's quite enough to generate a lot of volume and violent price swings.' Analysts calculate that 30-40 percent of Mannesmann shares are held by German shareholders, the group most likely to resist Vodafone's approach. But this figure is probably falling as abritrageurs buy up stock. The expectation that the battle was going Vodafone's way initially helped lift Vodafone shares to a high of 286 pence -- one penny more than the level at which the company launched its all-paper 124 billion euro ($127.7 billion), or 240 euro per share, bid on Friday. But by 1130 GMT the stock had surrendered those gains to stand unchanged at 275-1/2p after a low of 272p. Mannesmann's stock was also volatile, trading 5.4 euros lower at 187.70 after a high of 197.50. ``The market thinks the deal will probably happen,' said Mandeep Singh, telecoms analyst at ABN Amro. ``Vodafone needs to do this transaction strategically...The level that's been proposed appears to strike a fine balance between one that's going to be supported by its shareholders and that may be just about attractive enough to win sufficient Mannesmann shareholders.' ALL EYES ON MANNESMANN NEXT MOVE Mannesmann's management board has rejected Vodafone's bid and Chief Executive Klaus Esser will this week begin a charm offensive to try to persuade his shareholders to stand firm. But he indicated that Mannesmann would not resist regardless of price. ``If there is another offer that is good enough, we would recommend it,' he said in an interview with the Wall Street Journal Europe. Many analysts expect him to bring forward plans to demerge the engineering and automotive businesses, which had originally been scheduled for early 2001, and to announce aggressive profit forecasts which he is now free to do following the acquisition of UK mobile group Orange Plc (quote from Yahoo! UK & Ireland: ORA.L). It was the Orange deal that triggered Vodafone's own move for Mannesmann, its long-term European partner. The company is also likely to announce that the tax bill resulting from its demerger proposals would be significantly less than the 2.0-2.5 billion euros previously envisaged, the Financial Times reported. ``Demerging the to entities would make more obvious the considerable potential of Mannesmann Telecommunications,' said Michael Minzlaff of independent consultants Analysys. ``I would also expect to see some aggressive forecasts to justify the position that Mannesmann Telecommunications is very attractive proposition on its own.' Esser, who has turned Mannesmann from an industrial giant into a dynamic telecoms company, argues his strategy of integrating fixed and cellphone networks is a better one than Vodafone's focus solely on mobile

To: Chuzzlewit who wrote (2137)	11/22/1999 7:51:00 AM
From: MrGreenJeans	Respond to of 3175

C My question to the thread is this: if Mannesmann's poison pill is the prohibition against any shareholder voting more than 5% of the stock, does that blunt the influence of some large institutional holders, or is it simply designed to fend off an acquisitive company from purchasing more than 5%? The question is purely academic at this point. I believe the 5% restriction is their to fend off acquiring companies from attaining board control. This provision expires in June 2000 and a Vod-Mannesmann deal will not close by then anyway making the 5% restriction moot. The 5% restriction becomes useless in about 6 months.

To: Chuzzlewit who wrote (2137)	11/22/1999 7:51:00 AM
From: MrGreenJeans	Respond to of 3175

C My question to the thread is this: if Mannesmann's poison pill is the prohibition against any shareholder voting more than 5% of the stock, does that blunt the influence of some large institutional holders, or is it simply designed to fend off an acquisitive company from purchasing more than 5%? The question is purely academic at this point. I believe the 5% restriction is their to fend off acquiring companies from attaining board control. This provision expires in June 2000 and a Vod-Mannesmann deal will not close by then anyway making the 5% restriction moot. The 5% restriction becomes useless in about 6 months.

To: Chuzzlewit who wrote (2137)	11/22/1999 7:51:00 AM
From: MrGreenJeans	Respond to of 3175

C My question to the thread is this: if Mannesmann's poison pill is the prohibition against any shareholder voting more than 5% of the stock, does that blunt the influence of some large institutional holders, or is it simply designed to fend off an acquisitive company from purchasing more than 5%? The question is purely academic at this point. I believe the 5% restriction is their to fend off acquiring companies from attaining board control. This provision expires in June 2000 and a Vod-Mannesmann deal will not close by then anyway making the 5% restriction moot. The 5% restriction becomes useless in about 6 months.

To: Chuzzlewit who wrote (2137)	11/22/1999 7:51:00 AM
From: MrGreenJeans	Respond to of 3175

C My question to the thread is this: if Mannesmann's poison pill is the prohibition against any shareholder voting more than 5% of the stock, does that blunt the influence of some large institutional holders, or is it simply designed to fend off an acquisitive company from purchasing more than 5%? The question is purely academic at this point. This provision expires in June 2000 and a Vod-Mannesmann deal will not close by then anyway making the 5% restriction moot. The 5% restriction becomes useless in about 6 months.

To: Chuzzlewit who wrote (2137)	11/22/1999 8:00:00 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 3175

Voting restrictions are part of German regulations, and not necessarily the result of any policies originating at Mannesmann. German regulations are designed to discourage foreign majority ownership of German companies, and so far very successfully. As last week's Economist pointed out, there NEVER has been a foreign hostile takeover of a major German company, and the odds against this one are high. Unwillingness to accept an outside offer at a price considerably above earlier market value does not seem in itself an indicator of weak management. As a Vodafone shareholder, I ought to be entitled to know why VOD thinks the Mannesmann assets are worth so much. While VOD itself is quite well managed, especially the AirTouch component, I'm not convinced that biting off a chunk this big is something that ANY company can handle. I can point to dozens of large bank mergers, for example, that looked great because of the "synergy" (a favorite word of those favoring mergers), only to produce nothing more in terms of profits when put together than when run separately. Bigger isn't always better! The fact that VOD is exclusively wireless, and that new HDR technology will make wireless CDMA the technology of choice even in developed countries, makes me wonder why VOD would pay the kind of money it is offering for a concern that is only partly wireless.