Elliott sues for higher Kabel Deutschland squeeze-out -sources

FRANKFURT, July 16 Wed Jul 16, 2014 11:11am EDT

FRANKFURT, July 16 (Reuters) - U.S. hedge fund Elliott has filed a suit with a Munich court demanding higher compensation for minority shareholders in a squeeze-out of Kabel Deutschland by Vodafone, two people familiar with the matter told Reuters.

Vodafone secured just over three quarters of shares in Kabel Deutschland, Germany's largest cable company, with a 7.7 billion euro ($10.4 billion) takeover offer last year. The world's second-largest mobile operator is seeking to expand its offering of television and fixed-line services in Germany.

Sources told Reuters last September that hedge funds including Elliott, Davidson Kempner and York Capital were planning legal action in hopes that a court would force Vodafone to offer a higher price at the next stage of the buyout.

On Thursday, the two people familiar with the matter told Reuters that Elliott was demanding between 225 euros and 275 euros per share of Kabel Deutschland, roughly three times as much as the 84.53 euros in cash that Vodafone had offered.

A spokeswoman for a Munich regional court confirmed that the takeover of Kabel Deutschland by Vodafone was subject to legal proceedings but declined to provide details or say who had filed the lawsuit.

Vodafone, Kabel Deutschland and Elliott all declined to comment on the matter.

Monthly Manager Magazin had reported on the matter earlier, saying Elliott now held 13.5 percent of shares in Kabel Deutschland.

Elliott has sued for higher compensation as a minority shareholder in takeovers in the past - a strategy dubbed "playing the back end".

($1 = 0.7392 Euros) (Reporting by Arno Schuetze and Peter Maushagen; Writing by Maria Sheahan and Kirsti Knolle; Editing by Catherine Evans)

 
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