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Board rejects Vodafone bid
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November 26, 1999: 18:30 p.m. ET
Mannesmann CEO says Vodafone's bid is insufficient, and board rejects the offer
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LONDON (CNNfn) - Mannesmann’s supervisory board, as expected, formally rejected a takeover bid by Vodafone AirTouch. In a statement Sunday, the board said “the offer by Vodafone AirTouch is not attractive to Mannesmann shareholders since Mannesmann has a more favorable strategic position than Vodafone AirTouch.”
Mannesmann Chief Executive Klaus Esser also described Vodafone’s offered price as “totally insufficient.”
Following a rise in Vodafone’s share price last week, the all-paper bid is now valued at over 253 euros per share, or around 129 billion euros ($130.3 billion).
An initial 103 billion euro bid was also cashless and rejected by the German telecom and engineering group earlier this month.
The takeover battle will reach a new level this week when Vodafone’s chief executive will meet with Mannesmann's U.S. investors.
Chris Gent, Vodafone CEO, will begin a whirlwind round of meetings Monday in New York, giving face-to-face presentations to eight to 10 investors each day, as well as group briefings, industry sources told Reuters on Friday.
A takeover would give Vodafone (VOD) -- already the world's largest mobile phone company and a key partner with Mannesmann in several European markets -- 42 million customers and a pole position in the race to offer wireless data and voice services worldwide.
Relations between the two companies' executives have become frosty since Esser initially rejected a 203 euros per share offer from Vodafone CEO Chris Gent. That rejection prompted the British firm to plow ahead with the latest hostile offer.
Vodafone's interest in deepening ties with Mannesmann -- they each hold stakes in German cellular network D2 and Italy's No. 2 mobile operator Omnitel -- was sparked when the German firm made a surprise takeover of Britain's Orange. Orange is one of Vodafone's principal rivals in the British market.
Separately, Vodafone is considering a $7.6 billion bid to take control of Spain's second cellular operator, Airtel. Under the deal, Vodafone may exchange 5 percent of its own shares for the 30.45 percent of Airtel held by Banco Santander Central Hispano, the country's biggest bank.
Vodafone already owns 22 percent of Airtel.
If Vodafone does take its holding over 50 percent it would foil the ambitions of domestic rival British Telecom (BTY), which owns 18 percent of Airtel, and apparently would like to own more.
If the deal goes through, it would value the entirety of Airtel at $25 billion, substantially more than previously anticipated.
Airtel has one-third of Spain's booming cellular market, and had more than 4 million subscribers in October.
-- from staff and wire reports 
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