Kabel Deutschland Shareholders Reject New Audit on Vodafone DealAmy Thomson
Kabel Deutschland Holding AG shareholders rejected a bid to appoint a special auditor to re-examine Vodafone Group Plc’s acquisition of the German cable company as activist investors jockey for a higher price for their shares.
At a shareholder meeting Friday, 79.4 percent voted to reject the two proposals, Kabel Deutschland said in an e-mailed statement. Vodafone controlled 76.6 percent of Kabel Deutschland shares as of Jan. 10.
Elliott Management Corp., controlled by billionaire Paul Singer, demanded the special shareholder meeting in January, accusing Kabel Deutschland of breaches of duty to shareholders in agreeing to the price of 87 euros ($94) a share. New York-based Elliott said Friday it will ask a court to enforce the appointment of a special auditor to review the deal, which valued Kabel Deutschland at 7.7 billion euros.
In Germany, investors can refuse to sell during a takeover attempt and ask for a higher price, leaving it to a court to decide on the stock’s value. Vodafone has enough control over the asset that it’s been able to integrate Kabel Deutschland into its own operations.
Elliott has said a report by Frankfurt-based auditor Constantin GmbH valued Kabel Deutschland at 104 euros a share. Vodafone has called that price unrealistic, and said that an independent auditor gave the company a volume weighted average share price of 84.53 euros. Vodafone’s offer included a 2.50 euro dividend.
A spokesman for Newbury, England-based Vodafone declined to comment on the vote or Elliott’s statement. Elliott owned 13.5 percent of Kabel Deutschland as of January.
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