LONDON-Vodafone AirTouch plc is pushing forward with details to secure its takeover efforts of Mannesmann AG, while Mannesmann is making its own preparations to ward off the bid. Vodafone launched a $128 billion hostile takeover bid-the largest takeover bid in history-for Mannesmann Nov. 19 after Mannesmann rejected an earlier all-stock bid of about $106 billion.
The company is preparing to borrow up to $33.9 billion to bolster the bid, according to a Financial Times report. In addition, Vodafone Chief Executive Officer Chris Gent went on a week-long tour to visit investors across Western Europe and sell them on his plan.
In response to the bid, Mannesmann AG announced it will accelerate the separation and initial public offering of its engineering and automotive business. Mannesmann said the move will “maximize and bring forward the realization of cash proceeds to the company.”
The IPO will be pushed forward to mid-2000, from the previously targeted early 2001. Mannesmann said it would reduce its stake in the nontelecom business to less than 50 percent in 2000. Mannesmann first announced it would separate its telecom business from its engineering and automotive business earlier this year.
Although their influence most likely is minimal, Mannesmann workers support the company’s defensive strategy.
According to press reports, the takeover battle even garnered opinion from European politicians, with Gerhard Schr”der, the German chancellor, saying hostile bids destroyed the culture of the target company. U.K. Prime Minister Tony Blair countered by saying governments should respect the single European market.
Vodafone plans to post the formal tender offer to Mannesmann’s shareholders in mid-December.
