LONDON -- Vodafone AirTouch PLC today launched a hostile $128 billion takeover bid for the German engineering and telecommunications group Mannesmann AG, marking the biggest buyout offer in history.
Vodafone is approaching Mannesmann's shareholders directly with its sweetened offer after failing to persuade the German company's board to accept its initial bid.Mannesmann's supervisory board quickly rejected the new offer as well today. Juergen Ladberg, a labor representative on the board, said the sweetened bid "did not correspond to the value of the Mannesmann stock."
He said the board will take the matter up again at a special meeting on Nov. 28.
Vodafone, the world's No. 1 mobile phone business, is offering 53.7 of its own shares for each Mannesmann share. The offer is 18 percent higher than Vodafone's initial all-stock bid of $211 per share. Mannesmann rebuffed the initial friendly offer on Sunday.
"As a result, we have decided to make an offer directly to Mannesmann's shareholders," Vodafone chief executive Chris Gent told a news conference.
"I am convinced that a combination of Mannesmann and Vodafone AirTouch will produce enhanced growth prospects and superior value for the shareholders of both companies," Gent said, adding that the all-stock offer is final.
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.
A combined Vodafone-Mannesmann operation would be the world's leading international mobile phone group, with more than 42 million customers worldwide.
The offer eclipses MCI Worldcom's record $115 billion purchase last month of Sprint, a deal that still awaits approval by U.S. regulators.
Gent said his company received a message Thursday from the German group's chairman, Klaus Esser, making it clear he had no interest in negotiating with Vodafone.