Vodafone Stems Years-Long Elliott Legal Tiff With KDG Offer
Vodafone Offers KDG Holdouts Up to 2.1 Billion Euros For Stake
(Bloomberg) -- Vodafone Group Plc has offered the remaining minority investors in Kabel Deutschland Holding AG as much as 2.1 billion euros ($2.6 billion) to tender their shares, seven years after it agreed to buy the German telecommunications company.
Vodafone will give the remaining investors, including Elliott Management Corp., 103 euros for each share, the company said in a statement on Tuesday. Following the offer, Vodafone will own at least 94% of KDG’s outstanding shares.
At the time of the original offer, Vodafone managed to acquire about 77% of KDG, but was blocked from buying the rest by existing investors -- Elliott had recently become the German company’s biggest shareholder and argued for a higher offer. Vodafone struck an agreement that allowed it to continue to integrate the two companies, but also required it to pay compensation to the holders who hadn’t tendered.
Subject to the agreement, Vodafone was paying minority shareholders 3.17 euros per share annually in cash and had agreed to buy them out at 84.53 euros per share, with the offer price increasing every year, it said in Tuesday’s statement. Vodafone has received irrevocable undertakings from three holdouts with about 17% of KDG, worth 1.56 billion euros: DE Shaw, Elliott and UBS O’Connor LLC, it said.
Elliott and other minority holders in KDG lost a court challenge last year, where they claimed that Vodafone had underpaid for the purchase. Vodafone said Tuesday said the three holdouts had agreed to withdraw their appeal and not to take further legal action against it.
Vodafone shares fell 0.8% to trade at 121 pence at 8:07 a.m. London time.
The 2013 takeover aided Vodafone’s transition from a pure mobile service provider to one that offers multiple services. It cemented this path with the 18.4 billion euro acquisition of Liberty Global Plc’s German and eastern European cable business in 2019.
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