Vodafone Launches Mannesmann Hostile Bid With a Warning

Cell phone giant Vodafone AirTouch of Britain on Thursday formally launched the world’s largest hostile bid and told investors in Germany’s Mannesmann they would lose out if they rejected the offer.

Speaking at a news conference in Mannesmann’s hometown of Duesseldorf, Vodafone Chief Executive Chris Gent warned shareholders they would see returns diluted if they turned down a final offer of 53.7 Vodafone shares per Mannesmann share.

Publishing the offer document for its all-share proposal, valued at about $132 billion, Vodafone accused Mannesmann of pursuing a European strategy that was too pricey and offered limited growth prospects.

Mannesmann, for its part, said Vodafone’s offer lacked any substantial improvement to its earlier proposal that the German company rejected Nov. 19.

It reiterated its plea to Mannesmann shareholders to reject the bid it said did not do justice to the growth potential of its fixed-line, mobile phone and Internet businesses.

Gent said Vodafone should have little trouble cooperating with management at key Mannesmann subsidiaries if the bid, which remains open until Feb. 7, is successful.

These include fixed-line businesses Mannesmann Arcor and Italy’s Omnitel Pronto Italia, as well as Mannesmann Mobilfunk, which runs the group’s D2 cellular network.

Mannesmann has until Jan. 7 to present its defense. Both sides expect to start a second round of international road shows to investors in the final month of the open offer.

Vodafone’s American depositary receipts closed up 40 cents at $49 on the New York Stock Exchange. Mannesmann’s ADRs rose $8.13 to close at $242.13 in Nasdaq trading.