Vodafone says the required minimum of 75% of Kabel shareholders have voted to accept its €87 per share offer
Vodafone is to take control of Germany's largest cable company after Kabel Deutschland shareholders voted in favour of a buyout.
The €7.7bn (£6.5bn) acquisition is a milestone in Vodafone's strategy to counter declining revenues by selling mobile phone subscriptions alongside television, home telephone and broadband services.
Vodafone said that the required minimum of 75% of Kabel shareholders had voted to accept its €87 per share offer, which includes a €2.50 dividend payment.
In a statement, Vodafone said: "The 75% minimum acceptance condition has been met." They added that a definitive tally of shareholders who had not accepted its terms would be published on Monday.
Concerns were raised that Vodafone's bid would fall at the final hurdle after hedge funds piled into Kabel's stock hoping to squeeze a higher price from the British company.
The hedge fund Elliott Capital Advisors doubled its stake in the German group to 10.9% last week, but Vodafone warned that it would not lower the threshold for acceptances or sweeten its offer.
The deal gives Vodafone, the largest mobile network in Germany with 32m subscribers, access to 7.6m cable subscribers. Kabel's television service includes 32 free-to-air television channels, 100 digital TV channels and an array of radio channels, sold via individual contracts with customers or collective deals with apartment block landlords and housing corporations.
Following the $130 (£84bn) sale of its 45% stake in America's largest mobile phone network, Verizon Wireless, which will see 71% of the proceeds returned to shareholders, Vodafone will have a £30bn war chest with which to pay down debt, improve its networks and fund further takeover deals.
The company has committed £6bn over the coming three years to Project Spring, pushing out 4G network coverage to 90% of the population in its five main European markets by 2017.
Vodafone has extended the deadline for acceptances for Kabel shareholders still holding out against its offer. Hedge funds occasionally choose to remain minority shareholders in a takeover, gambling that the buyer will offer a higher price for the final few shares in order to take full control.
Minority Kabel shareholders have until midnight on 30 September to hand over their shares. The deal must also be approved by European commission regulators.
The announcement came as Vodafone's German mobile business sought to reassure customers after a hacker stole the names, addresses and bank account numbers of two million customers.
Vodafone warned customers the details could be used to obtain further information with which bank accounts could be hacked, and that the data must have been obtained by individuals working at the company.
"This attack was only possible with the utmost criminal energy as well as insider knowledge and happened deep within the IT infrastructure of the company," Vodafone said. The investigation was reportedly looking into a person who was working for a sub-contractor for Vodafone's administration system.
Vodafone's revenues in Europe have been sliding as economic woes take their toll on its Italian, Spanish and Greek businesses. Cuts to call costs, both for the price of calling a mobile from a landline and for making calls while travelling within the European Union has reduced revenues even in resilient markets like the UK and Germany.
With mobile phone ownership now at saturation point in Western markets, networks are looking for new sources of growth.
In the UK, Vodafone has already acquired the British assets of Cable & Wireless, which add miles of fiber-optic cables with which to connect mobile phones to the internet, and a telecoms business selling services to corporate and public sector clients.
Colao's strategyAt first glance Vodafone boss Vittorio Colao's strategy is a head scratcher. He has sold an immensely valuable investment in Verizon Wireless, the largest mobile phone company in the world's richest market, only to spend the money buying up assets in recession-hit Europe.
But as any good investor knows, the trick is to sell at the top and buy at the bottom. Verizon's boom years may soon be challenged by a US price war. Kabel Deutschland succumbed at a sensible price without a real contest – the only other suitor, John Malone's Liberty Global, backed away after round one. Last year, Cable & Wireless Worldwide and its 20,500 kilometers of fibre optic lines was acquired for a mere £1bn.
Vodafone is expected to turn its attention now to Fastweb, Italy's third largest broadband operator with 1.9m customers and a book value of €2.9bn. Fastweb's owner, Swisscom, rebuffed earlier approaches but might now be willing to deal. Spare change from the Verizon sale will cover the cost.
After using some of the proceeds to pay down debt, Vodafone will have a strong balance sheet with which to fund more ambitious deals, at a time when debt markets are recovering from their credit crunch coma.
VodafoneTelecommunications industryJuliette Garsidetheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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