Communications giant Vodafone (VOD) has moved to settle a seven-year legal battle over its acquisition of Kabel Deutschland.
Vodafone said on Tuesday that it has offered more than €2 billion euros to buy out minority shareholders in Kabel Deutschland in a deal aimed at ending the saga with hedge fund Elliott Advisers and others over the buyout price offered for Kabel Deutschland.
Vodafone shares drifted 0.7% lower on Tuesday to 121.07p.
LOW TAKEOUT PRICE CLAIMS
The UK company bought a near 77% stake in the German cable company in 2013 for €7.7 billion, a deal that Elliot and other minority stake owners argued was too low. This had led German courts to rule in favour of Vodafone in 2019, finding that the compensation offer was ‘adequate’.
Kabel Deutschland minority shareholders launched an appeal of that ruling.
Today’s deal offers all minority shareholders a €103 per share cash payout, a settlement that Vodafone said shareholders representing 17% of stock had accepted, including Elliott Advisers.
Vodafone, which acquired 76.8% of KDG in 2013, said it would own at least 93.8% of the business following completion of the offer.
EARNINGS AND CREDIT RATING LIFT
The company said consideration for the shares for which it had received undertakings would total €1.56 billion, rising to €2.12 billion if all minority shareholders accepted the deal.
The acquisition sum would be funded from Vodafone's existing cash resources.
Vodafone said the offer would be immediately earnings accretive, neutral to its credit ratings, and reduce its exposure to legal proceedings related to the Kabel Deutschland acquisition.
