FRANKFURT (Reuters) - U.S. hedge fund Elliott has filed another lawsuit in its battle with Vodafone over the price of the British group’s takeover of German cable firm Kabel Deutschland.
Elliott Management Corporation, which holds 13.5 percent in Kabel Deutschland, said on Tuesday it had asked a Munich court to order the company to give it a full copy of a report prepared by a special auditor.
The auditor, appointed at the company’s annual general meeting last year, looked into the actions of Kabel Deutschland and Vodafone before and during their merger negotiations, which were announced in June 2013.
“Kabel Deutschland has found information which is contained within the report that is data sensitive, i.e. personal data of employees, or commercially sensitive. Consequently, Kabel Deutschland will today convey these points to the Special Auditor,” the company said.
“We expect the Special Auditor to react accordingly and then Kabel Deutschland will send this report to any shareholder that requests it.”
At Kabel Deutschland’s annual meeting earlier this month, Chief Executive Manuel Cubero said the auditor had found that the offer price may not have been appropriate.
Cubero denied the accusation.
Vodafone secured just over three quarters of the shares in Germany’s largest cable company with its 7.7 billion euro ($9.8 billion) takeover offer, expanding the British mobile operator’s television and fixed-line services in Germany.
In July 2014, Elliott, and investment management firms Davidson Kempner and York Capital sued Vodafone for a higher compensation. The funds had tendered some of their shares to enable Vodafone to complete the deal.
Elliott has asked for 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 person familiar with Elliott’s thinking said, depending on the findings of the special auditor, the investor may take further action.
Potential additional steps include demanding an extraordinary general meeting, which the investor can force as it owns more than 5 percent of the company.
Elliott said in a statement that shareholders have the right to access the report in its full, unredacted version and draw their own conclusions: “What is in the report that the company doesn’t want shareholders to see?”
Elliott has sued for higher compensation as a minority shareholder in takeovers in the past, a strategy dubbed “playing the back end”.
Additional reporting by Kate Holton; editing by Georgina Prodhan and David Clarke