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 (2161)	11/23/1999 10:04:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Vodafone suffers double blow to bid hope BY CHRIS AYRES VODAFONE AIRTOUCH, the mobile phone colossus, suffered a big setback yesterday when Hutchison Whampoa, the Hong Kong investment group, and America's largest workers' organisation rejected its œ74 billion hostile bid for Germany's Mannesmann. Shares in Vodafone, which has categorically stated that it will not raise its offer, fell 2*p to 273p yesterday, while shares in Mannesmann fell euro6.2 (œ3.94) to euro180. Vodafone's all-paper bid is now worth some œ5 billion less than when it was tabled on Friday. Hutchison Whampoa holds a 10 per cent stake in Mannesmann, while the American Federation of Labor-Congress of Industrial Organisations claims to have indirect influence over another 13 per cent of Mannesmann's shares. These shares are owned by "collectively bargained" US pension funds, many of which have AFL union members on their boards of trustees. The other funds over which the AFL has some influence are simply negotiated by the organisation's union members. The AFL has no direct power over pension investments. Hutchison, controlled by Li Ka-shing, the billionaire property magnate, took its stake in Mannesmann after the German company bought Orange, the British mobile phone group. Hutchison founded Orange in 1994 and held a 45 per cent stake before selling it to Mannesmann in a œ22 billion deal, which was finalised yesterday. Canning Fok, managing director of Hutchison, said: "Jointly with Orange, Mannesmann will be an outstanding company and better positioned than Vodafone for future opportunities in the telecoms business. The combination of Orange and Mannesmann is, in my opinion, very powerful and offers the best opportunity for Hutchison's shareholders to participate in the rapid growth of the European telecoms sector." Analysts pointed out that Hutchison had already agreed to hold on to most of its 10 per cent stake in Mannesmann for 18 months after the Orange deal. The agreement will automatically end, however, if Vodafone gets more than 50 per cent of Mannesmann's shares. John Sweeney, president of the AFL, said Vodafone's bid would threaten "the fundamental sources of value within Mannesmann". He added: "Value is created over the long term by partnerships among all a corporation's constituents . . . Mannesmann and the European model of corporate governance under which it is structured has allowed just those kinds of value-creating partnerships to flourish. "Worker capital, the savings of America's working families, should support value-creating partnerships like those at Mannesmann." Vodafone said Chris Gent, chief executive, would meet many of the pension fund managers to persuade them that the bid is worthwhile. Meanwhile, Mannesmann stepped up its defence against Vodafone by saying that it would spin off its engineering and automotive businesses sooner than expected, in the middle of 2000. This is likely to push up the value of its telecoms division. Mannesmann also said that profits for the nine months to September 30 rose 3.2 per cent to euro1,11 billion. More than euro1 billion of this came from telecoms, which grew 45 per cent during the period.