LONDON -- Mannesmann AG of Germany lost its bid to derail one of the largest corporate takeover bids in history when a judge upheld the authority of U.S. investment bank Goldman Sachs to advise Mannesmann's pursuer, Vodafone AirTouch PLC.
High Court Judge Sir Gavin Lightman dismissed Mannesmann's allegations that the investment bank was guilty of a conflict of interest.A Mannesmann spokesman, speaking from the company's headquarters in Dusseldorf had no immediate comment.
Meanwhile, Vodafone's management board planned to meet Thursday to consider whether to press ahead with a hostile offer for Mannesmann, a German telecommunications and engineering group, an official at Vodafone said, speaking on condition of anonymity.
Mannesmann had sought a ruling that would force Goldman Sachs to stop advising Vodafone, the world's No. 1 mobile phone company, in its preparations to make a revised buyout offer for Mannesmann.
Mannesmann rejected Vodafone's earlier all-stock offer, worth $72.1 billion based on Wednesday's closing share price.
Vodafone executives met with key shareholders Wednesday in an effort to decide how much to offer in a new bid, and the company expects to make a new, potentially hostile offer for Mannesmann on Friday.
Goldman Sachs had stopped advising Vodafone on its bid after Mannesmann won a temporary injunction Monday -- a move that Vodafone chief executive Chris Gent dismissed at the time as a sign of desperation.
Mannesmann had argued that Goldman Sachs obtained confidential information that could help Vodafone make a hostile bid.
Goldman Sachs was one of three investment banks acting as advisers to Britain's fourth-largest mobile phone business, Orange PLC, for which Mannesmann made a friendly offer last month.
It also worked on part of a $5.6 billion Mannesmann share issue a year ago.
Goldman Sachs had said it acted properly and would challenge the allegations "vigorously."
The High Court ruling will allow Goldman Sachs to resume its work with Vodafone. While awaiting the decision, Vodafone had added Donaldson, Lufkin & Jenrette Inc., another U.S. investment bank, to its advisory team.
Today's decision added a new dash of drama to what was already shaping up as battle of corporate titans.
Both Mannesmann and Vodafone are vying for a dominant role in Europe's fast-growing mobile communications industry, a market that some analysts believe will double in value to $100 billion over the next five years.
Mannesmann, which has a strong presence in Germany and Italy, insists that its strategy of integrating mobile and fixed-line phone services provides better prospects for growth than Vodafone's exclusive focus on wireless services.
Several industry analysts have said Vodafone will need to raise its bid to around $260 per Mannesmann share from the initial $211 a share offer.