Elliot Management seeks higher valuation for its shares in Kabel Deutschland

By Marc Castro

Oct 10, 2013 05:32 PM EDT

Elliot Management Corp, one of the shareholders in Kabel Deutschland Holding AG, is holding out against the overtures of Vodafone Group Plc in its bid to convince investors to cash out. Should shareholders do as the British wireless company bids, then Vodafone would be able to takeover the German cable company.

Elliot had retained 11% shareholdings since September. At that time, investors were asked to tender their Kabel Deutschland shares to the British firm. This was confirmed by the German firm at a shareholder meeting in Munich. Elliot Management is hedging that it can force a higher valuation from Vodafone with the hold out. 

A law in Germany allows investors to refuse any call to sell their shares during a takeover attempt and at the same time ask for a higher price. This would leave the court to decide on the stock's actual value. As of the latest count done by October 7, nearly 77% of Kabel Deutschland shareholders have accepted the offer from Vodafone. All the members of Kabel Deutschland's board of directors have agreed to the purchase offer from Vodafone, as confirmed by Kabel Deutschland CEO Adrian von Hammerstein. 

Vodafone is scheduled to pay the investors who have accepted their offer by next week. For his part, Kabel's CEO would stand to receive EUR6.6 million or USD8.9 million because of the sale.

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