LONDON â€" The British telecommunications giant Vodafone faces a nervous wait on Wednesday as the shareholder voting deadline approaches for its proposed takeover of the German cable operator Kabel Deutschland for 7.7 billion euros, or $10.1 billion.
The deadline for Kabel Deutschland investors to accept or reject the offer is midnight Wednesday in Germany, which is 7 p.m. Wednesday in New York.
Although the offer has the backing of Kabel Deutschland’s board, Vodafone still appeared to be far short of the threshold of 75 percent of the German company’s shareholder votes that are required for approval. Vodafone had so far only secured around 20 percent of investors’ support for the takeover, according to a statement from the British company early Wednesday.
Vodafone, which made its bid for Kabel Deutschland in June, reiterated in a statement this week that it would not improve its offer of 87 euros a share. The company called on Kabel’s shareholders to tender their outstanding shares in favor of the deal.
A number of hedge funds, including Paul Singer’s Elliott Management, hold sizable minority stakes in Kabel Deutschland, Germany’s largest cable company, setting up a battle over whether Vodafone will have to increase its offer to seal the deal.
Many investors may still tender their shares just before the deadline on Wednesday, as some shareholders could still be holding out for a last-minute rival bid from the likes of John C. Malone‘s Liberty Media, which owns Germany’s second largest cable operator, Unity Media.
Analysts warn, however, that any rival bid might face antitrust scrutiny from both German and European Union officials. And they said it was unlikely that Vodafone would increase its offer for Kabel Deutschland.
â€Vodafone is already paying a full price,†said Will Draper, a telecom analyst at Espirito Santo in London. â€It’s not their style to put in a low-ball offer just to come back with a higher offer later on.â€
A spokesman for Vodafone declined to comment. A representative for Elliott Management, which owns around a 11 percent stake in Kabel Deutschland, was not available for comment.
The stand-off comes just over a week after Vodafone agreed to sell its 45 percent stake in Verizon Wireless to its American partner, Verizon Communications, in a blockbuster deal valued at $130 billion.
Amid rumors that Vodafone may now be looking to scoop up telecom and cable assets across Europe, the company has announced that it is handing its shareholders around 70 percent, or $84 billion, of the windfall from the Verizon Wireless sale.
Vodafone also plans to invest $9.2 billion over the next three years to upgrade its network infrastructure, as more consumers use their smartphones and mobile devices to surf the Web.
Still, for the British company, the acquisition of Kabel Deutschland would represent an important step in expanding its business in Germany, Europe’s strongest economy.
Vodafone has extensive fixed-line and mobile customers in Germany, but the company is trying to beef up its cable offerings to compete with the likes of Deutsche Telekom, the country’s dominant provider.
