US HEDGE fund titan Elliott International yesterday demanded German cable television operator Kabel Deutschland – in which Elliott has a 13 per cent stake – explain a special auditor’s report concerning Vodafone’s €8bn (£5.3bn) takeover of the German firm in June.
The US investment giant has called for an extraordinary general meeting for the purpose of voting for a another special audit to further examine the Kabel board’s behaviour in relation to the controversial takeover. Elliott wants a special auditor to look at possible breaches of duty by the board in regards to its alleged obstructions to an auditor in the initial special audit.
According to Elliott, this latest report has found that the internal valuation of Kabel by its management and advising investment banks was significantly higher than the price offered by Vodafone, therefore making the board’s subsequent recommendation that shareholders accept Vodafone’s €84.50 offer price “implausible”.
“The findings of the special auditor’s report contain troubling allegations that pertain to the fair valuation of KDG and to breaches of duty by the company’s management and supervisory boards,” Elliott said in a statement.
“As a large shareholder with a significant investment to protect, we demand that these topics be addressed and explained in an EGM.
“If KDG and Vodafone acted in accordance with the law before and during the takeover, then it should be in their own best interest to support a new special audit covering the period after 31 March 2013 and clear up the severe allegations raised in the report.”