'Vodafone AirTouch’s bid for Mannesmann\r'

'First of all, genius has to mention that it is endlessly difficult to tax a lodge. There is no case-by-case mea certainly/calculation who can exceed you the rating of a come with. The value of a gild can be different for e very single human being. For instance, Vodafone Air nonion go out endeavor to calculate a very low military rank of the company because it wants to pay as less as possible, and Mannesmann a very high valuation, because it wants to get as very much money as possible. As a result, it often depends on the interest of the different persons who value a company. In October 1999, Mannesmann gaped dowers around 157. €. This was before the science of Orange PLC, a competitor of Vodafone Air Touch in the UK market. After the acquisition, Vodafone suffered 266€ per fortune, 68% more than the 157. 8€ per share Mannesmann supplyed few weeks before. Despite, this very high premium, Mannesmann’s chief executive officer prised his c ompany 350€ per share.\r\nHere in this case, I mobilise that the main soil for this high damage differences is that with time, Mannesmann’s bargaining prepare changed. In the beginning, their position was non as strong as in the end when they achieved to acquire Orange Plc, a telecom company in the U. K. which was growing faster than Vodafone. As a result, Mannesmann became a stronger competitor for Vodafone and Mannesmann’s CEO knew that. As a consequence, he increased the valuation of his company. The reason why for instance an analyst from Julius Baar valuated Mannesmann amidst 250€ and 350€ per share and some other analysts between 174€ and 250€ per share may have some reasons. The main reason is that, as anticipated before, it is very difficult to evaluate a company. Furthermore, it is regular(a) more difficult to evaluate how many synergies Vodafone Air Touch would benefit from this putsch.\r\nSo it is very difficult to eval uate how much this Mannesmann deportover could be worth for Vodafone Air Touch. Moreover, one has to deviate which analysts own stocks of Mannesmann or Vodafone because this may also influence the different evaluations. (2) In your survey, in general, when a company is the target of a hateful coup wish, who should go down whether the terms and conditions of this bid are acceptable? The mind Executive Officer (or the equivalent) of the target company? Or its prexy (if a nonher person than the CEO)? Its board of directors? Its shareholders ?\r\nIf the shareholders, how often should they make their finale? In my opinion, scarcely the shareholders should back out this type of decision. They are the one who own the company, and they should purpose if they accept the peeover bid or non. If 50 % + X agree with the bid price, then the takeover should take place. Of course, before taking the decision, they should listen to the opinion of the CEO, the Chairperson, some analys ts, as well as the display board of Directors. However, in my opinion, none of these key persons should take wear of the decision making process.\r\nIn my opinion, the shareholders are the one who own the company, and they should watch what should happen with their investment. For instance, let us assume the employees would take part of decision making process. Then, in most of the cases, the employees would right to vote against a take over, because they fear about their jobs. They would neer take a neutral decision, unless a decision which is the outdo for them, not caring about the fact that the shareholders disengage a high premium. They, as well as the trade unions, would vote against an takeover because they fear for the jobs.\r\nHowever, they never remember about the fact, that if the company is not interpreted over, the company who made a mid ashes a competitor. And this competitor could increase its market share in spite of the smaller company that did not accept the takeover. And in this case, the employees of the smaller company would even risk to loose more jobs. The CEO and the the Chairperson should never take this type of decisions. Because, they are only in charge of the operations of the company, but they do not own the company. As a result, they should not decide about the matter. 3) In the case of the Vodafone AirTouch bid for Mannesmann, who should have made the decision ? (Please take into chronicle the fact that Mannesmann had two boards, the supervisory board, and the management board) What do you think of the sentence in the fourth split up of page 5 of the case: â€Å"Esser rejected the offer on the grounds that it was inadequate” ? As verbalise before the shareholders should have taken this decision. They own the company and if 50 % + X is in favour of Vodadone AirTouch’s bid, then the company should accept the bid.\r\nLet’s assume that you invested 50 000 € in Mannesmann’s shares and ri ght away somebody is offering you 80 000 € for the shares. Then you should decide if you accept this money, or if you think that your shares are much worthier in some months/years. In that case you vote against the hostile takeover. I think that this system makes the decision making also very rapid and efficient. In fact, if one would also bring the employees, some analysts and so on, then the decision making process would be much longer.\r\nAs a result, I think that the shareholders should take the decision, after having listened to the different opinions of the CEO, employees, analysts,.. However, I think it inacceptable that Esser as the CEO of the company, who does not own many shares, rejects the offer in the name of all the investors. This cannot be tolerated. In fact, he is like an employee of Meeresmann, he does not own the company, and he should take the best decisions for his shareholders who in some way gave him this job as CEO.\r\nAs a result, I think that he cann ot take the decision to refuse a bid without having talk with any shareholder of the company. This is not a personalized decision, but a decision which influences all the stakeholders of the company. It is unimaginable that he takes the decision on behalf of all the share- and stakeholders. (4) If you had been a shareholder of Mannesmann on December 17, 1999, what would you have wish to say to Klaus Esser ? What would you have like to say to Chris lumberman ?\r\nIf you had had the opportunity to vote to accept or not Vodafones bid, how would you have voted (please ignore the subsequent events not expound in the case) ? As a shareholder of Mannesmann, I would liked to ask him why he refused an offer of 266€ per share, which is a premium of 72. 2 % compared to Mannesmann’s destruction price on October 18th. I would blame him for not having asked the shareholder what they thought about the offer. He took a decision about something which did not own him, but where I ow ned a fraction.\r\nFinally, I would ask him if he could guarantee me that the share price of Meeresmann would be as high as the Vodafone AirTouch’s offer in the future. Only if this is the case, the Esser would be partly excused. I mention only partly, because even if he thinks that the share price of Meeresmann will be higher in the near future, then he should have explained that to the shareholders. And then, if the legal age of the shareholders would agree, then he could refuse the offer. As a shareholder of Mannesmann, I would ask him what would be the strategy of Vodafone AirTouch after the acquisition of Meeresmann.\r\nThis is important to me, because I will have to make an important decision if the hostile takeover is agreed: either I keep open the Vodafone shares or I sell all the shares the mean solar day of the take over. In that way, I would gild the premium. I would definitely have accepted the deal. During that time, it was quite sure that a consolidation of the telecommunication market would happen. As a result, I think that it would have been very difficult for Meeresmann, as one of the smaller companies, to bear in that market environment. Furthermore, the offered premium was so high, that I could not deny this offer.\r\n'