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

To: MrGreenJeans who wrote (2517)	2/10/2000 10:48:00 AM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Vodafone Deal Unconditional, Shares Fall By Richard Baum LONDON (Reuters) - Mobile phone giant Vodafone AirTouch Plc declared its $159 billion offer for Mannesmann AG unconditional on Thursday, passing a milestone on its way to completing the world's biggest takeover. Vodafone said it had secured 60.3 percent of the German company's share capital since Mannesmann agreed last week to accept the bid, which gives Mannesmann shareholders 49.5 percent of the world's fourth biggest company. Despite expectations the news would trigger a surge in demand from tracker funds, Vodafone shares fell more than four percent at one point to the levels they stood at when it launched its bid in November. That left them 20 percent shy of the record high of 4.01 pounds reached a week ago. ``At these prices you're picking it up very cheap,' said Sean Johnstone, analyst at SG Securities, who expects the stock to rise back above four pounds when its index weighting is lifted on Monday. He attributed the decline to general weakness in telecoms stocks and continued volatility from arbitraguers exploiting differences in the Vodafone and Mannesmann share prices. Vodafone shares were 3.6 percent lower at 3.23 pounds at 1125 GMT, valuing its all share offer for Mannesmann at 160.4 billion euros ($159 billion). Mannesmann fell 2.9 percent to 307.51 euros. Surge In Trade Expected The London Stock Exchange expects to see on Friday an avalanche of trade in Vodafone, already generating record volumes, as tracker funds raise their stake to reflect its increased capitalization. The enlarged company's prospective market value of some 200 billion pounds ($322.2 billion) is expected to lift the stock's weighting in the FTSE 100 index from eight to as much as 15 percent, creating a problem for funds that try to track the index. Index-tracking unit trusts, among the most popular mutual funds in the UK, are banned from having more than 10 percent of their assets in any one stock and are concerned they will underperform the index if Vodafone shares continue their stellar rise. The exchange expects such funds to raise their stakes to the 10 percent threshold late on Friday and plans extraordinary measures to cope with the demand. Some 236 million shares had changed hands in the first three hours of Thursday's trade, compared with record levels of more than one billion last week. After the stock is reweighted in FTSE indices before the start of trade on Monday, the market's focus will turn to what demands the European Commission makes of Vodafone to allay its competition concerns. In particular, investors are keen to know if the Commission will force the company to find a trade buyer for Orange Plc rather than demerge it as Vodafone plans. Airtel Could Be Next There is also interest in whether Vodafone will make other acquisitions as it seeks to extend its footprint deeper in Europe and into Asia. The most immediate target could be Airtel, Spain's second biggest mobile phone company. Vodafone is vying with British Telecommunications Plc to take control of Airtel by buying a 30.5 percent stake from Banco Santander Central Hispano (BSCH). But both have run into difficulties because of an existing agreement among shareholders to split any shares offered for sale. Airtel shareholders are meeting on February 22 to discuss eliminating that restriction, opening the door to a Vodafone bid, industry sources say. Vodafone is thought to be in a stronger position to win because BSCH has said it wants to stay invested in mobile phones, implying it would prefer to swap its Airtel stake for Vodafone and not BT shares.