Vodafone 2003 Annual Report Download - page 7

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003 5
On 29 October 2002, the Board of Vivendi announced it had decided not to
accept the Group’s offer to purchase its 44% interest in Cegetel and, accordingly,
the offer lapsed. On 3 December 2002, Vivendi also announced its intention to
exercise its preemption rights to acquire BT’s 26% interest in Cegetel.
On 21 January 2003, the Company announced that its subsidiary, Vodafone
Holding GmbH, completed the acquisition of SBC’s 15% interest in Cegetel for a
cash consideration of $2.27 billion (£1.4 billion), increasing the Group’s effective
interest in SFR to approximately 43.9%.
Other significant transactions completed in the year ended 31 March
2003
Purchase of additional minority stakes in existing subsidiary undertakings
In line with the Group’s strategy of increasing its shareholding in existing
operations where it believes opportunities arise to enhance value for the
Company’s shareholders, the Group purchased minority stakes in certain of the
Group’s subsidiary undertakings in order to be able to more closely align the
respective businesses to the Group’s business.
Europolitan Vodafone AB (“Vodafone Sweden”)
During September 2002, the Group increased its effective interest in its listed
subsidiary Vodafone Sweden by 3.6% to 74.7% through a series of market
purchases.
In January 2003, the Company entered into discussions with the board of
Vodafone Sweden concerning a possible tender offer to acquire, for cash, all
remaining shares not held by the Group. A recommended offer was announced
on 5 February 2003. As a result of shares bought in the offer and in the market,
the Company increased its effective shareholding in Vodafone Sweden to
approximately 99.1%. The total aggregate cash consideration paid was £391
million. Compulsory acquisition procedures have commenced to acquire the
remaining shares. Completion is expected during the first half of the 2004
financial year, as a result of which Vodafone Sweden will become a wholly owned
subsidiary of the Group. Vodafone Sweden’s shares have been de-listed from the
O-list, Attract 40, of the Stockholm Exchange. The last day of trading for
Vodafone Sweden’s shares was 28 March 2003.
Vodafone Libertel N.V. (“Vodafone Netherlands”)
On 27 November 2002, the Group announced the purchase for cash of an
additional 7.6% interest in Vodafone Netherlands, increasing the Group’s interest
from 70% to 77.6%.
In January 2003, the Company entered into discussions with the boards of Vodafone
Netherlands concerning a possible tender offer to acquire, for cash, all remaining
shares not held by the Group. An offer was announced on 12 February 2003 and
was declared unconditional on 28 March 2003. As a result of the offer at that time
and market purchases, the Company increased its effective interest in Vodafone
Netherlands to 97.2% as at 31 March 2003. The total aggregate cash consideration
paid in the 2003 financial year was £486 million, with a further £110m paid in April
2003. Following a post-closing acceptance period, the Company, as a result of the
offer and market purchases, increased its effective interest in Vodafone Netherlands
to 98.2%. The Company has further increased its effective interest to 99.7%. The
Group intends to initiate squeeze-out procedures in order to acquire the remaining
shares following the successful completion of which Vodafone Netherlands will
become a wholly owned subsidiary of the Group. Vodafone Netherlands’ shares have
been de-listed from the Euronext Amsterdam Stock Exchange.
Vodafone Telecel-Comunicações Pessoais, S.A. (“Vodafone Portugal”)
During September 2002, the Group increased its effective interest in its listed
subsidiary Vodafone Portugal to 61.4% through market purchases.
In January 2003, the Company entered into discussions with the board of
Vodafone Portugal concerning a possible tender offer to acquire, for cash, all
remaining shares not held by the Group. The offer was announced on 28 February
2003. Following completion of the offer, the Company’s effective interest in
Vodafone Portugal increased to approximately 94.4% as a result of shares
purchased in the offer and in the market. The total aggregate cash consideration
paid in the 2003 financial year was £184 million, with a further £336 million paid
in April 2003. The Company has completed compulsory acquisition procedures to
acquire the remaining shares. Vodafone Portugal is now a wholly owned
subsidiary of the Group. De-listing of the shares occurred on 22 May 2003.
Vodafone-Panafon Hellenic Telecommunications Company S.A. (“Vodafone
Greece”)
On 27 November 2002, the Group announced an agreement to acquire from
France Telecom S.A. (“FT”) its 10.85% interest in Vodafone Greece for £216
million cash. The transaction completed on 3 December 2002 and increased the
Group’s effective shareholding in Vodafone Greece from 51.88% to 62.73%. In
addition, the Company granted FT a cash settled call option to cover certain of
FT’s obligations under its 4.125% Exchange Notes due 29 November 2004,
which are convertible into Vodafone Greece shares. Exercise of this option will
not change the Company’s effective interest. During the period the Group also
made additional market purchases which increased the Group’s effective interest
in Vodafone Greece to 64.0%.
Other subsidiaries
On 3 May 2002, the Group completed the purchase of the 4.5% minority interest
in Vodafone Australia Limited (“Vodafone Australia”), formerly Vodafone Pacific
Limited, for a cash consideration of £43 million, as a result of which Vodafone
Australia became a wholly owned subsidiary.
On 23 January 2003, the Group increased its stake in V.R.A.M.
Telecommunications Limited, now called Vodafone Hungary Mobile
Telecommunications Limited (“Vodafone Hungary”), to 83.8% by purchasing RWE
Com GmbH & Co OHG’s 15.565% interest in Vodafone Hungary for an
undisclosed cash consideration. An option over certain of these shares was also
granted on this date. See “Operating and Financial Review and Prospects –
Liquidity and Capital Resources”.
Acquisition of remaining 50% interest in Vizzavi
On 29 August 2002, the Group acquired Vivendi’s 50% stake in the Vizzavi joint
venture, which operates a mobile content business, for a cash consideration of
1143 million (£91 million). As a result of this transaction, the Group owns 100%
of Vizzavi, with the exception of Vizzavi France, which is now wholly owned by
Vivendi. The Group plans to continue focusing Vizzavi’s operations on providing
multi-media entertainment-led consumer content aimed at increasing customer
usage and to further integrate these operations into the Group. The acquired
assets also form an integral part of the Group’s strategy in providing
differentiated services to its customers and form part of the Group’s consumer
service offering, Vodafone live!. Vizzavi has since been renamed Vodafone
Content Services and services are provided under the Vodafone brand.
Acquisition of additional interest in associated companies
During December 2002, the Group completed the purchase of an additional
3.5% indirect equity stake in its South African associated undertaking, Vodacom
Group (Pty) Limited (“Vodacom”), for a sum the sterling equivalent of which was
£78 million. The transaction increased the Group’s effective interest in Vodacom
to 35%.