Vodafone offers £1.9bn to buy out German firm amid long-running legal battle

Vodafone has offered to buy out minority investors in Germany’s biggest cable firm for £1.9billion (2.12 billion euros) amid a long-running legal battle over its 2013 takeover of the group.

The mobile phone giant has been embroiled in a legal spat since it bought a controlling 76.8 per cent stake in Kabel Deutschland seven years ago for £6.5billion (7.7 billion euros).

Minority shareholders – including US activist investor Elliott Management – have been battling against Vodafone in the courts over the price paid in the takeover.

They recently launched an appeal against a ruling that the price paid in the takeover was ‘adequate’, which Vodafone said was ‘expected to take several years to complete’.

Vodafone has offered to pay £94 (103 euros) per share for the holding in Kabel Deutschland that it does not already own – a move it said would reduce its ‘exposure to ongoing legal proceedings’ related to the 2013 acquisition.

Vodafone said investors advised by DE Shaw, Elliott Advisors and UBS O’Connor had already accepted the offer for their combined 17.1 per cent stake and agreed to withdraw from the court appeal as part of the deal.

Elliott had also made a number of agreements, including pledging not to take further legal action against Vodafone.

Vodafone added that in accepting the offer, all Kabel Deutschland shareholders would agree to waive their rights to any proceeds from the ongoing court case.

The deal will increase Vodafone’s debt by £909 million (one billion euros) to £41.9 billion (46.1billion euros) if all investors accept the deal.