Vodafone has called upon Kabel Deutschland (KDG) shareholders to accept its €87 per share takeover offer as it stands after a weekend report suggested it may fail to reach the required 75% acceptance level.
The UK-based operator issued the reminder…
Vodafone has called upon Kabel Deutschland (KDG) shareholders to accept its €87 per share takeover offer as it stands after a weekend report suggested it may fail to reach the required 75% acceptance level.
The UK-based operator issued the reminder today, noting that the terms and conditions of its €7.7bn (US$10.2bn) public offer, launched on 30 July, will remain unchanged. This includes the deadline for shareholders to tender the shares, still Wednesday 11 September.
A Financial Times report yesterday stated that some KDG shareholders believe the level of acceptances will fall well short of the minimum level. Shareholders were cited as saying the deal could fall apart if Vodafone does not reduce the threshold before Wednesday. Two of the shareholders noted that the 75% threshold is higher than similar recent deals in Germany.
However, Vodafone made it clear in its statement today that its offer will lapse if the 75% threshold is not met by the deadline, adding that there will not be an additional acceptance period.
Vodafone is offering €84.50 per KDG share, but this will be upped to €87 per share if settlement takes place before cableco’s shareholders meet to resolve on the proposed €2.50 per share dividend for the last financial year.
EC to examine deal
Vodafone also announced that Germany’s antitrust regulator, the Federal Cartel Office (FCO), has confirmed it will not ask the European Commission (EC) to review the deal itself. As such, merger clearance is required by the commission only.
Vodafone notified the commission of the merger on 16 August, and the deadline for the EC’s Phase I investigation is 20 September. Vodafone said it expects the investigation to complete that day, implying that it does not foresee that the regulator will open a phase II in-depth review.
Vodafone has said previously that it aims to settle the deal by early June 2014 at the latest, but it could close as early as October if the EC clears the deal after the Phase I investigation.
If the 75% threshold is not met, Vodafone may be barred from making another takeover offer for 12 months, the FT cited KDG shareholders as saying. However, they noted that it could ask the market regulator, BaFin, for a waiver.
A failed bid could make KDG the target of another large operator. John Malone’s cable giant Liberty Global (LGI) made a preliminary offer of about €85 per share for the German cableco before conceding defeat to Vodafone. Meanwhile, US incumbent AT&T is said to be scouring Europe for acquisition opportunities.
Last week, Vodafone agreed to sell its 45% stake in US mobile operator Verizon Wireless to its JV partner Verizon Communications for US$130bn. The deal is expected to close in Q1 2014 subject to regulatory and shareholder approvals.
