This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Vodafone Stands Firm on Kabel Bid

NEW YORK ( The Deal) -- U.K. cellphone services company Vodafone Group (VOD) on Monday, Sept. 9, said it wouldn't sweeten a €7.7 billion ($10.2 billion) cash offer for Germany cable business Kabel Deutschland Holding amid concern acceptances may fall short of the stipulated 75% minimum.

Kabel shareholders face a deadline of midnight German time to tender their stock.

"There will not be any additional acceptance period should the 75% acceptance condition not be met by Wednesday, 11 September 2013," the bidder said.

Vodafone's announcement follows the arrival of hedge funds on the Kabel register after Vodafone announced an agreement with the target's board. Although investors generally wait until the last minute to tender shares, analysts say the new shareholders may be trying to pressure Vodafone into bumping the price higher.

"I said early on I didn't think the offer was high enough. It's going to be tight but it'll probably squeak by," said Commerzbank analyst Heike Pauls. She has a reduce rating on the shares.

On Sept. 2, Paul Singer, head of hedge fund Elliot Associates, disclosed a 5.1% Kabel Deutschland stake. A number of banks, including Credit Suisse Group, Bank of America Merrill Lynch and JP Morgan Chase also made similar announcements, though it's unclear if they were buying the shares for themselves or fund customers.

"We think the deal will proceed and their efforts to have the bid raised will prove fruitless," said M.M. Warburg & Co. analyst Malte Rather. He has a hold rating on the stock. "We think it's a very attractive offer."

Despite Vodafone's Monday statement, Rather said the U.K. company could, at the last minute, decide to prolong the offer and improve the terms.

Vodafone is an obvious target for shareholders looking for an easy buck - the telecommunications giant earlier this month agreed to sell a 45% stake in its U.S. Verizon Wireless venture to its partner Verizon Communications (VZ) for $130 billion.

Vodafone, of Newbury, England, wants to use the proceeds to bolster existing businesses and expand in emerging economies. Kabel Deutschland will allow Vodafone to move expensive data traffic off its cellular network more quickly. It will also be able to offer customers cable TV services and gain access to Kabel's customers.

Kabel Deutschland shares slipped 1.1%, or €0.90, in morning Frankfurt trading to €84.85, below the €87-per-share bid. That offer includes a €2.50-per-share dividend for the year ended March 31.

Written by Andrew Bulkeley

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
VOD $32.74 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs