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

To: MrGreenJeans who wrote (2241)	12/23/1999 11:17:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Financial Times-Lex Column VODAFONE: Waiting for the Mannesmann Vodafone AirTouch's bid for Mannesmann may not be a done deal just yet, but it is looking increasingly like one. By yesterday's close, Mannesmann was at a 9 per cent discount to the offer price. For a pure paper deal that implies a degree of uncertainty. But the discount has more than halved since terms were announced last month. What are the remaining risks? One is political. But though economic nationalism may still be a factor - there was the odd pointed question from German journalists at Thursday's Dsseldorf press conference - it is sufficiently clear that German capitalism has much to lose from slamming the door on shareholder value. A related risk is that Mannesmann could mount a thwarting bid for another European mobile business. But again, it seems late in the day for Mannesmann to antagonise its international shareholders so blatantly. The biggest risk in the whole venture is arguably Vodafone's, in making its bid unconditional on clearance from the European competition authorities. But that, after all, should weigh on the Vodafone share price, not Mannesmann's. The market appears unconcerned by this: and given that the deal should lead to cheaper mobile calls across Europe and a developed pan-European service, it may be right. The other risk concerns Orange. There will doubtless be some destruction of value through a spin-off: the business will be worth less than Mannesmann paid for it. But given the soaring value of mobile phone stocks lately, no one assumes the Orange price will revert to where it was before Mannesmann's bid. Orange might also find it slightly awkward to bid for a third generation phone licence in the forthcoming UK auction. But Vodafone's solution is to put it into a blind trust until disposal: and the UK government has taken steps this week to allow Vodafone and Orange to bid jointly or severally, even under the same ownership. Meanwhile, the whole bid is resolving into what seems, from a UK or US perspective, a more familiar pattern. Vodafone has given up trying to wheedle, and has gone hostile. But it also wants Mannesmann's management to stick around, and promises no redundancies. There seems little reason to disbelieve that. This is, after all, a fast-growing industry, and the two companies already have several valuable joint ventures to protect. The final issue, of course, is that of value. That, too, seems a forlorn cause. Doubtless, Mannesmann's shareholders are not quite getting top price. But they are getting stock in what looks a promising global enterprise: and if the deal were to collapse, there seems little doubt that both share prices would drop. Doubtless, other bidders would then sniff around. But as investors may well calculate, a bird in the hand, in these frothy markets, is worth a flock in the bush.