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BERLIN – As the Feb. 7 deadline approaches for Vodafone’s hostile, paper-only bid for German telecom giant Mannesmann, media and analysts alike in Germany are vying with one another to predict the winner.German analysts are not giving much weight to Vodafone’s offer to improve its bid, following Mannesmann chairman Klaus Esser’s rejection.The Financial Times reported Thursday that Vodafone-Airtouch plc CEO Chris Gent was ready to raise its bid if Mannesmann dropped its opposition, but it did not offer majority control.Esser told the newspaper a deal giving Mannesmann shareholders 58.8% of the enlarged company could be the basis of a deal.Analyst Chris-Oliver Schickentanz of Hoppenstedt Research said the token improvement Vodafone was offering would not entice many investors to switch camps. It merely showed the old offer was not good enough.Schickentanz, who has previously recommended against Vodafone’s offer, said the price of Mannesmann’s shares was so high, he had decided to recommend shareholders sell now and take their profits. Mannesmann shares would not reach such heights again for a long time to come, he predicted.That did not mean he was recommending shareholders accept the 53.7 for one, share-swap being offered by Vodafone. His reasoning: Those Vodafone shares would be overhanging the market and depressing the price once the offer closed.Analyst Ralf Hallmann of Bankgesellschaft Berlin took a different tact. He argued Vodafone’s that proposal to increase its offer would make no difference, as it depended on Mannesmann accepting the company’s terms. “The two sides are too far apart for that,” he said.Hallmann, however, then predicted the current offer could be the beginnings of a compromise that would allow the two companies to try again in a year or two if Vodafone fails in its bid on Feb. 7.Hallmann did not believe it was in either company’s interest to destroy their relationship. The only winners would be Deutsche Telekom and Telecom Italia if Vodafone and Mannesmann could not work together in their jointly-owned mobile phone companies in Germany and Italy.The most comprehensive scan of investors’ intentions so far must be the search carried out by the German weekly Wirtschaftswoche. Thursday’s edition comes complete with a photo of journalist Juergen Berke, proudly posing with his 25-yard printout of the 5,000 individual fund names supplied by Canada’s Thomson Securities Financial Data.The magazine found that of the 500 million Mannesmann shares in circulation, held by 140,000 shareholders, 40% are held by the top 50 investors.German investors make up about a third. Small German investors are only about 14% of the total, and half of those are Mannesmann employees.Another quarter are British, 20% are from the United States and the rest are spread out in Europe and Asia. The biggest single shareholder is Hong Kong’s Hutchison Whampoa-formerly the owner of Mannesmann’s subsidiary Orange.The magazine opined that if Frankfurt votes for Mannesmann and London votes for Vodafone, then the decision will be made in the United States.When the magazine polled the top 50 Mannesman shareholders the results showed Mannesmann was still ahead “by a nose.” But more and more investors were switching to Vodafone, the magazine reported. “Anglo-Saxon” shareholders in particular, the magazine said, who account for about 40% of the total, were “turning their back on Mannesmann’s Klaus Esser,” said the report.Mannesmann could rely only on its big German investors, Hutchison Whampoa, and those U.S. investors with a larger shareholding in Mannesmann than in Vodafone, said the report.America’s Capital Research, the second biggest shareholder, would probably stay with Mannesmann, the magazine argues. Others, like Fidelity Management, American Century and Janus Capital, with heavier weighting in Vodafone would go the other way.Meanwhile, German investment houses are still watching and waiting, but believe the German market is still with Mannesmann. A poll by Deutsche bank subsidiary DWS Investment GmbH found small German investors were not convinced by Vodafone’s pitch. Some 80% doubted the strategic value of a Vodafone takeover, while just 13% saw it as positive.The poll, reported in the Frankfurter Allgemeine Zeitung, received 608 responses to 1,000 questionnaires. It also found 80% of respondents supported Mannesmann’s defense strategy, though 55% had no objections in principle to a hostile takeover bid if the terms made strategic sense.

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