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LONDON (Alliance News) - US hedge fund manager Elliott Management Corp has filed another lawsuit in its ongoing battle with Vodafone Group PLC over the price of the company's takeover of Kabel Deutschland GmbH.
Elliott, which has a 13.5% stake in Kabel Deutschland via the Elliott Associates LP and Elliott International LP hedge funds, the German cable television operator, has requested a court in Munich give it permission to see a special report prepared by an auditor who probed the actions of Kabel and Vodafone prior to, and during, the British mobile group's takeover last year.
According to media reports, Kabel Chief Executive Manuel Cubero said during the company's annual meeting this month that the auditor report had alleged the two companies may have communicated on a potential deal before it was formally announced in June 2013. He added the auditor had found the offer price may not have been appropriate, though he denied both allegations.
Elliott claims Vodafone first attempted to cancel the special audit and then noted the criticism of the auditor's report at the most recent Kabel Deutschland meeting by Cubero.
"Now, the management is refusing to provide shareholders with access to the report. This pattern of obstructing shareholder attempts to gain transparency into the Vodafone transaction is unacceptable and lacking any legal basis," Elliott added.
"Furthermore, it is absurd that the company has criticised the special auditor's report but won't make that report accessible to shareholders. What is in the report that the company doesn't want shareholders to see?"
Vodafone completed the acquisition of Kabel Deutschland in a EUR7.7 billion deal last year, having launched a hostile bid for the company in June 2013. It acquired 77% of Kabel Deutschland in the deal. Elliott and investment managers Davidson Kempner and York Capital then sued Vodafone to secure higher compensation for the deal. Elliott was requesting EUR225 to EUR275 per share of Kabel Deutschland, around three times the EUR84.53 Vodafone offered.
Vodafone shares were among the best performers on the FTSE 100 in afternoon trade on Tuesday, up 2.2% to 202.00 pence.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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