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

To: MrGreenJeans who wrote (2219)	12/18/1999 10:35:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Sunday Times of London Mannesmann knows its true economic value MY heart says it would be wonderful if Chris Gent and his Vodafone team could do what no other British company has managed and clinch a mega-takeover of a German company. After watching United Biscuits follow BOC into the grasp of a foreign-dominated break-up, it would be tremendous for UK plc to seize the high ground in a leading-edge industrial sector. My head, however, tells me that, on Vodafone's current terms, Gent's adversary, Klaus Esser of Mannesmann, can make a convincing case for his investors to keep faith with him. Esser's defence against this week's Vodafone offer document will revolve around three main points. First, that Mannesmann's strategic control positions in European mobile should command a premium over Vodafone's predominantly minority holdings and that the value differential will widen over time. Second, that Mannesmann's strategy of integrated mobile and fixed-line communications will give it an extra growth dimension in the on-line world. Vodafone, despite Gent's protestations, basically does not believe in owning fixed networks. The third point follows from the first two: Vodafone's immediate contribution to a merged group would be to destroy value, because of the enforced disposal of Orange. Mannesmann will contribute the incremental value growth - so, Esser can argue, its investors should be entitled to more than half a combined group, not the 47.3% now on offer. The value debate can be taken further. There is a strong case for believing that, far from enjoying the protection of Fortress Germany as many have suggested, Esser and his company are to some extent imprisoned by it. Arguably, were Mannesmann a British or American stock, it would be more highly rated. As the sad examples of UB and BOC prove, sentiment rather than strategic value tends to dictate stock-market valuations - especially in Britain. To see through to Mannesmann's true economic value, many potential investors felt they had to peer through the dark glass of German political prejudices, an impression heightened since the Vodafone bid by Gerhard Schr”der's ridiculous posturing about hostile takeovers. But in ownership terms, Mannesmann is a remarkably open company - by global, not just German standards. Its share register is more widely spread than that of almost any big public American or British company. As Vodafone well knows, Mannesmann's judge and jury will be the equity markets, not Schr”der. The stock should be on a significantly higher rating - one that is not fully reflected in the terms of Vodafone's current bid.