Berlin, Jan 15: German mobile phone and engineering group Mannesmann has boosted its defences against a hostile takeover from the UK's Vodafone group.Mannesmann says its shares are worth far more than Vodafone is offering and that it is planning to float both its mobile phone and Internet arms in the stock market. It says its Internet business, with 2.6 million customers in Germany and Italy, is the third biggest in Europe.Mannesmann chief executive Klaus Esser told a press conference that Mannesmann was a "bright star" and Vodafone a "sinking sun" as he urged shareholders to place their faith in his company.
"Do nothing. Do what you've always done. Keep your Mannesmann shares. Don't go in for the offer. You don't have to get involved in any paper work. Throw (the offer) in the bin," he said. Biggest hostile takeover. Vodafone's 135bn euro (£85bn) offer is the world's biggest contested takeover bid, and it is causing considerable hostility in Germany, where most mergers are agreed in advance.
In aformal defence document, Mannesmann says that based on the potential value of its Internet and mobile phone businesses, using the comparable value of other internet service providers, the Vodafone bid is far too low.
Mannesmann reiterated that Vodafone's final bid of 258 euros per share was "fully inadequate and hides considerable risks". It suggests that 350 euro per share would be closer to its true value, and it urges shareholders to reject the bid as "insufficient and offering no premium". Mannesmann forecast its profits would grow by 30 per cent annually. It argued that growth prospects in Europe were bright, and its integrated online and telephone services would give it a huge advantage.
It warned that regulatory delays in approving any deal with Mannesmann could cripple the group during a year of fast-moving developments in telecommunications, putting the company in the "deep freeze". It said the future of Orange, Mannesmann's fast-growing UK mobile phone company, could be put at risk by the deal.Shareholders holding back Mannesmann announced it was reshuffling its management and launching an incentive scheme linked to the company's share price.
Mannesmann shares reached a new record in Frankfurt of 249 euros, but it is still trading below the Vodafone offer price. "You could say Mannesmann's share price performance reflected well on Vodafone, but there is nothing in this bid yet to get shareholders really committed," said one fund manager.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.