Activist investor calls for Kabel Deutschland EGM on Vodafone takeover

Kabel Deutschland

Vodafone majority-owned Kabel Deutschland has been asked to call an extraordinary shareholders’ meeting to look into whether its management gave accurate and timely information to investors at the time of its takeover. 

Hedge fund group Elliott Management, which holds a stake of about 13.5% in the company, has requested the meeting and has called for the appointment of an independent auditor to look into the matter.

Elliott last year initiated legal action against Vodafone, arguing that Kabel Deutschland minority shareholders should receive a higher payout. Its case was boosted by an audit report published in December that found the cable company to be worth €104 a share, considerably more than the €84.53 per share that Vodafone offered to minority shareholders. Elliott told its own investors that Kabel Deutschland could be worth up to €250 a share and that Vodafone could be liable for up to €8 billion in compensation.

Vodafone said at the time that the auditor’s report findings were “unrealistic”. Vodafone’s offer was accepted by the majority of Kabel Deutschland’s shareholders.

Kabel Deutschland issued a statement that it would review the latest request.

“Kabel Deutschland Holding AG, Unterfoehring, today received a request by Cornwall 2 GmbH & Co. KG by telefax to invite to an extraordinary general meeting which shall, inter alia, be provided with the special auditor’s report as well as vote on the appointment of special auditors on matters related to the takeover by Vodafone Vierte Verwaltungs AG and to detect alleged breaches of duty by members of the Company’s boards in connection with the executed special audit,” it said. “The company will review the request and invite to a general meeting in case the legal requirements are met.”