September 11, 2013 10.19 Europe/London By Julian Clover
Vodafone’s €11 billion takeover of Kabel Deutschland (KDG) rests on a knife edge as the British telco waits to see whether it will receive the three-quarters of votes required by midnight Wednesday.
The emergence of activist investor Paul E Singer from hedge fund Elliott Asset Management is causing consternation. Last Friday, Singer doubled his stake to 10.9%, and is now seeking improved terns from Vodafone. Elliott Asset Management is now KDG’s largest shareholder.
As of Tuesday only 14% of shareholders had given their approval. If Vodafone does not meet the necessary 75% threshold the offer for KDG would lapse, though it could turn to the regulator to allow a new offer to be posted.
The company insists the price of €84.5 per share in cash with a €2.50 dividend and the minimum acceptance threshold will not be adjusted, which would in all likelihood mean Vodafone would have to later buy out any remaining minority shareholders.