Elliott filed a complaint in German courts that said Vodafone should’ve paid more than 250 euros a share for the German cable operator, about three times greater than its 84.53 euro-a-share price, according to the hedge fund’s quarterly letter to investors.
That potential payout, along with interest German law requires it to offer to shareholders who held out on tendering their shares in the original offer, is a good reason for Vodafone to offer remaining investors a premium to submit their stock, Elliott said.
“The status quo does not make much economic sense for Vodafone,” Elliott said in the letter. “We believe that a buyout of the minority KDG shareholders, even at a significant
premium to the current stock price, would be highly value-accretive for Vodafone.”
Vodafone shares fell 0.9 percent to 205.15 pence in London trading at 8:51 a.m. They have lost 31 percent this year.
A court-appointed auditor said that Vodafone’s offer was sufficient and two independent reviews put the value of Kabel Deutschland at 75.76 euros a share, Vodafone said in an e-mailed statement. Vodafone holds more than three-fourths of Kabel Deutschland stock and reached a “domination agreement” with the company last year, which enabled it to take control. Elliott owned about 13 percent of Kabel Deutschland as of April, according to data compiled by Bloomberg.
Stores for Vodafone Group Plc, left, and Kabel Deutschland Holding AG sit side by side... Read More
The Financial Times reported the letter earlier yesterday.
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