Vodafone KD merger doubtful

Vodafone was unwilling to change the conditions of its takeover bid for German cable operator Kabel Deutschland, despite shareholders' concern that the deal might fall apart, British business daily Financial Times (FT) reported Monday.

Under the deal, 75 percent of Kabel Deutschland shareholders must tender their shares in a first part of a two-stage tender process by midnight Wednesday. Vodafone is offering a total of 87 euros ($114) per share in the deal, estimated to be worth about 10 billion euros.

“There'll be no change to the conditions set out in our earlier announcement,” FT quoted from a statement by Vodafone.

However, FT also reported that a number of Kabel Deutschland shareholders had expressed the view that the Vodafone bid might fail to secure the necessary minimum level of acceptance.

Since 2007, eight major tenders in Germany had foundered on the required minimum share level, and the average number of shares tendered in German takeovers was just 68.5 percent, FT quoted an unnamed Kabel Deutschland shareholder as saying.

Another shareholder, quoted by FT, also said that the required minimum was higher than in similar deals recently, and that he feared the merger might fail.

Kabel Deutschland shareholders, FT wrote, were especially concerned about the large number of shares held by index-tracking investors. So-called tracker funds, which own about 10 percent of the German cable firm, were unlikely to tender their shares in the first wave, preferring to wait until the second deadline, the business daily added.

If Vodafone fails to secure the necessary number of shares, it can be banned from relaunching a second takeover bid for 12 months.

uhe/tj (dpa, Reuters)