Vodafone 2005 Annual Report Download - page 23

Business |21
Transactions since 31 March 2002
Acquisitions
MobiFon and Oskar
On 15 March 2005, the Company announced that its wholly-owned subsidiary,
Vodafone International Holdings B.V., had entered into agreements with Telesystem
International Wireless Inc. (“TIW”) of Canada to acquire approximately:
•79% of the share capital of MobiFon S.A. (“MobiFon”) in Romania, increasing the
Group’s ownership in MobiFon to approximately 99%; and,
•100% of the share capital of Oskar Mobil a.s. (“Oskar”) in the Czech Republic
for cash consideration of approximately $3.5 billion (£1.9 billion) to be satisfied from
the Group’s cash resources (the “Transaction”). In addition, the Group would assume
approximately $0.9 billion of net debt.
The Transaction is conditional on TIW shareholder approval, the receipt of all necessary
unconditional regulatory and Canadian Court approvals and certain customary
conditions. The Board of TIW has recommended that its shareholders vote in favour of
the Transaction. Certain shareholders of TIW (namely certain affiliates of J.P. Morgan
Partners LLC, Caisse de dépôt et placement du Québec, and AIG Emerging Europe
Infrastructure Fund L.P.), who collectively own 33.6% of TIW’s outstanding share
capital, have entered into agreements to vote in favour of the Transaction and not to
solicit any competing transaction. The Transaction is expected to complete by the end
of June 2005. A termination fee of $110 million will be payable to Vodafone by TIW if
the TIW Board withdraws or adversely modifies its recommendation of the Transaction
and in certain other customary circumstances.
Subsidiary undertakings
The Group’s strategy is to increase its shareholding in existing operations where it
believes opportunities arise to enhance value for the Company’s shareholders. During
the past three financial years, the Group purchased minority stakes in certain of the
Group’s subsidiary undertakings in order to be able to align more closely the respective
businesses to the Group’s business.
Japan
On 1 August 2002, Japan Telecom Co., Ltd was renamed Japan Telecom Holdings Co.,
Ltd, and its fixed line business was transferred to a newly established wholly owned
subsidiary, Japan Telecom Co., Ltd (“Japan Telecom”). This created a
telecommunications service group comprising two core businesses of mobile and fixed
line telecommunications, namely J-Phone Co., Ltd and Japan Telecom.
During the 2004 financial year, the Group sold its interest in Japan Telecom, as
described under “Disposals”. In addition, J-Phone Co., Ltd was renamed Vodafone K.K.
on 1 October 2003 and Japan Telecom Holdings Co., Ltd. was renamed Vodafone
Holdings K.K. on 10 December 2003.
On 25 May 2004, the Group’s wholly owned subsidiary, Vodafone International Holdings
B.V., announced offers for the shares not held by the Group in Vodafone Holdings K.K.
and Vodafone K.K. As a result of these offers, the Group increased its effective
shareholding in Vodafone K.K. to 98.2% and its stake in Vodafone Holdings K.K. to
96.1% for a total consideration of £2.4 billion. On 1 October 2004, the merger of
Vodafone K.K. and Vodafone Holdings K.K. was completed. At 31 March 2005, the
Group held a 97.7% stake in the merged company, Vodafone K.K.
The Group has applied for Vodafone K.K.’s shares to be delisted from the Tokyo Stock
Exchange, which is expected to occur in the 2006 financial year.
Spain
On 2 April 2002, the Company acquired a further 2.2% interest in its Spanish mobile
operating subsidiary for £0.4 billion, following the exercise of a put option held by
Torreal, S.A.
On 27 January 2003, the Company completed the acquisition of the remaining 6.2%
interest in its Spanish mobile operating subsidiary for approximately €2.0 billion (£1.4
billion) following the exercise of a put option held by Acciona, S.A. and Tibest Cuatro,
S.A. under the terms of an agreement originally made in January 2000.
Greece
On 3 December 2002, the Group completed the acquisition of a 10.85% interest in its
then listed Greek operating subsidiary, Vodafone-Panafon Hellenic Telecommunications
Company S.A. (“Vodafone Greece”), from France Telecom S.A. for £216 million in
cash. The transaction increased the Group’s effective holding in this company from
51.88% to 62.73%. During the 2003 financial year, the Group made market
purchases of shares which increased the Group’s effective interest to 64.0% at 31
March 2003.
On 1 December 2003, following the purchase of a 9.433% stake in Vodafone Greece
from Intracom S.A., the Group announced a public offer for all remaining shares not
held by the Group. As a result of the offer and subsequent market purchases, the
Group increased its effective interest in Vodafone Greece to 99.4% at 31 March 2004.
The total aggregate cash consideration paid in the 2004 financial year was
£815 million.
Vodafone Greece’s shares were delisted from the Athens and London Stock Exchanges
on 15 July 2004 and 20 August 2004 respectively.
Between 24 January 2005 and 31 March 2005, the Group acquired a further 0.4%
interest in Vodafone Greece through private transactions at a price equal to the price
paid in the public offer.
The Netherlands
On 27 November 2002, the Group purchased for cash an additional 7.6% interest in
Vodafone Netherlands, increasing the Group’s interest from 70% to 77.6%.
As a result of a cash offer for the remaining shares of Vodafone Netherlands not held
by the Group and market purchases, the Company increased its overall effective
interest in Vodafone Netherlands to 97.2% at 31 March 2003. The total aggregate
cash consideration paid in the 2003 financial year was £486 million, with a further
£110 million paid in April 2003. As a result of private transactions, the Group
increased its effective interest in Vodafone Netherlands to 99.9% at 31 March 2004.
The Group has exercised its rights under Dutch law and initiated compulsory
acquisition procedures in order to acquire the remaining shares. Following these
procedures, Vodafone Netherlands will become a wholly owned subsidiary of the Group.
Vodafone Netherlands’ shares have been de-listed from the Euronext Amsterdam Stock
Exchange.
Sweden
During September 2002, the Group increased its effective interest in its then listed
subsidiary, Vodafone Sweden, by 3.6% to 74.7% through a series of market
purchases.
A recommended cash offer for all remaining shares in Vodafone Sweden not held by
the Group 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% at 25 March 2003. The total aggregate cash
consideration paid was £391 million.
Under compulsory acquisition procedures, on 15 March 2004 Vodafone Holdings
Sweden AB obtained advanced access to an aggregate of 2,377,774 shares in
Vodafone Sweden, giving the Group ownership of and title to these shares. An arbitral
tribunal in Sweden is currently determining the purchase price for the shares.
On 31 March 2004, the Group increased its effective interest in Vodafone Sweden to
100% by the purchase of 1,320,000 shares which were held in treasury by Vodafone
Sweden for a total consideration of SEK62 million (£4 million).