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

To: David Wiggins who wrote (2237)	12/23/1999 12:23:00 PM
From: David Wiggins	Read Replies (1) \| Respond to of 3175

Vodafone Hits Back at Mannesmann By Steven Silber DUESSELDORF, Germany (Reuters) - Cellphone giant Vodafone AirTouch Plc on Thursday formally launched the world's largest hostile bid and told investors in Germany's Mannesmann AG they would lose out if they rejected the offer. Speaking at a news conference in Mannesmann's home town of Duesseldorf, Vodafone's Chief Executive Chris Gent warned shareholders they would see returns diluted if they turned down a final offer of 53.7 Vodafone shares per Mannesmann share. Publishing the offer document for its all-share proposal, currently valued at around 131 billion euros ($132 billion), Vodafone accused Mannesmann of pursuing a European strategy that was too pricey and offered limited growth prospects. ``Mannesmann has already invested significant resources and still only has a significant presence in four countries,' it stated. ``Developing further in Europe will be very expensive and will require significant equity and debt resources. ``Continuing calls for further funding from Mannesmann shareholders, resulting in additional dilution of their interest, would seem the inevitable consequence if Mannesmann remains independent.' Cooperating With Mannesmann Managers Gent said Vodafone should have little trouble cooperating with management at key Mannesmann subsidiaries if the bid, which remains open until February 7, is successful. These include fixed-line businesses Mannesmann Arcor AG and Italy's Omnitel Pronto Italia SpA (OPI), as well as Mannesmann Mobilfunk GmbH, which runs the group's D2 cellular network. ``I don't believe there will be friction. We know the D2, OPI and Arcor management well. We have a high regard for them and quite a few have benefited from being trained by us,' Gent told Reuters. ``We have a regard for some of the telecom managers who work in the headquarters, so we hope they'd work with us,' he said. Gent said Mannesmann's combative Chief Executive Klaus Esser could stay on in a combined company, even though he repeatedly rejected Vodafone's calls for talks. Mannesmann representatives were envisaged sitting on Vodafone's board in a merged group, he told the news conference. If Vodafone does manage to win over 50 percent of Mannesmann's shares, it will need to take control of Mannesmann's management and supervisory boards. If the members do not resign, the group will be able to request a shareholder meeting to pass a ``no confidence' vote in the management team. The Risk Of Losing Mannesmann Asked whether losing the bitter bid battle for its partner in Germany, Italy and France would be a severe blow to Vodafone's European aspirations, Gent conceded that a key growth opportunity would be lost. But he added: ``I don't believe this company would be in difficulty. I think it would be a significant opportunity missed to enhance growth. We could be creating a unique European world leader and that's an opportunity that does not come very often.' Gent said Mannesmann's fixed-line assets could play a role in a combined group despite the British company's current focus on cellular telephony. ``The long-term potential is good if they stay focused on the high bandwidth business market. If they try to chase after the consumer market -- which is going wireless anyway -- I think that could dissipate value,' he said. He reiterated that Vodafone would float a stake of about 20 to 25 percent in Arcor and Italian counterpart Infostrada and that it sought to list Vodafone shares in Frankfurt before the takeover bid ends. Calling on shareholders to accept its ``generous' offer that would give Mannesmann 47.2 percent of the combined group, Vodafone said an enlarged firm would provide a superior platform for lucrative data and Internet services in an industry where the need to be global was paramount. With the 46-day offer due to start ticking on Christmas Eve, Mannesmann has until January 7 to present its defense -- unless it asks for an extension. Both sides expect to start a second round of international road shows to investors in the final month of the open offer. Vodafone's stock was trading 1.77 percent higher at 302p by 1445 GMT while Mannesmann gained 2.40 percent to 236.70 euros. Mannesmann's shares are trading around 10 percent below the offer price -- a discount that has been narrowing as arbitrageurs have started betting on Vodafone's success.