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

To: Ibexx who wrote (2199)	12/3/1999 10:19:00 AM
From: David Wiggins	Read Replies (1) \| Respond to of 3175

Mannesmann gains as Vodafone seen winning FRANKFURT - Shares in Mannesmann AG rose over two percent as investors bought the stock on the expectation that Vodafone AirTouch Plc (LSE: VOD.L - news) 's hostile bid for the German group would succeed, traders said. The 2.45 percent rise to 223.35 euros (139.64 pounds) came as Vodafone Chief Executive Chris Gent predicted that shares in the British-based mobile phone services giant would top 320p if its bid succeeded. "People reckon the Vodafone bid will succeed and so they are buying Mannesmann shares as there is a big gap between Mannesmann's share price and the Vodafone offer," one trader said. In Frankfurt midsession trade, Vodafone's all-paper bid valued Mannesmann at around 258 euros per share, or some 131 billion euros for the whole group. Gent told Italian financial daily Il Sole 24 Ore his all-share offer for the German group, now valued at 133 billion euros (83 billion pounds) or some 262 euros per share, was very generously priced and was garnering support with shareholders from both sides. Mannesmann management has already formally rejected Vodafone's revised bid. Referring to German political objections to the unsolicited advance, he added that if the bid failed for reasons other than market ones, the whole of Germany would feel the impact as quoted companies would lose value. "Our argument is simple. The two companies are worth more than the sum of their parts," Gent told the paper after a trip to the United States to woo investors. "I've received a very positive response, both from our shareholders and from many Mannesmann shareholders." Mannesmann Chief Executive Klaus Esser has argued that the stand-alone business is worth more than Vodafone's offer, and that the bid price is insufficient and risky without a cash element. But Gent said: "Last month, when Mannesmann issued shares to buy (British cellphone operator) Orange , it fixed a price of 153 euros. I think a 100 euro per share premium in such a short time is a very generous offer. "Furthermore, the market is convinced that once the bid has gone through, there will be a revaluation of Vodafone that will lift it above 320p per share." Vodafone is now around 302p. Gent said that would be equivalent to some 270-275 euros per share for Mannesmann. "With these valuations, even in the context of a hostile bid, we have every probability of winning," he said. He added that in 2000 Mannesmann would be worth 36 percent of the new group in terms of earnings before interest, tax, depreciation and amortisation. "We're offering 47 percent. I repeat, we're being very generous." German Chancellor Gerhard Schroeder said last month that attempting hostile bids on German firms could ruin their corporate culture, but Gent said the whole country could suffer. "This operation marks a watershed. If it fails for non-market reasons, the whole of Germany will feel it because quoted companies will lose value and the cost of raising capital will thus increase," Gent said. "I'm pro-European and I believe in European unity. But a Europe in which corporate and market logic prevails." Mannesmann has accused Vodafone of a blurred strategy in building a network of minority holdings in various joint ventures across Europe, but Gent said its bid envisaged building a world-leading pan-European group. He said that with Mannesmann, Vodafone's control of joint-ventures would rise to 10 out of 15 from seven out of 15. "We are also in other negotiations with other partners," he said, but gave no further details. He was also asked about reports that Vodafone wants to take a majority stake in Airtel, Spain's second biggest mobile operator. "That's been written in the press but I can't comment," Gent said. He also confirmed plans for a partial listing of the fixed-line Arcor and Infostrada businesses if the bid succeeds. Mannesmann Chief Executive Klaus Esser is currently on a roadshow in the United States in an effort to convince his group's shareholders to reject Vodafone's bid. REUTERS