Elliott welcomes decision of regional court Munich I to order further special audit at Kabel Deutschland Holding AG

DGAP-Media / 10.06.2016 / 13:50

- Elliott, holder of 14.43 percent of Kabel Deutschland Holding AG ("KDG")
shares, welcomes the decision of regional court Munich I to order a second
special audit at KDG and to appoint Martin Schommer as special auditor.

- The purpose of this second special audit is to conduct an in-depth
investigation to the behaviour of the KDG management in connection with the
takeover by Vodafone, including the period from March 31st 2013. The first
audit completed in September 2014 revealed several concerning findings
which Elliott believes need further investigation and over an extended
period of time.



Munich (June 10th 2016) - Elliott Associates, L.P. and Elliott
International, L.P. together with affiliated entities ("Elliott"), today
announced that Elliott welcomes the decision of the regional court Munich I
to order an additional audit at Kabel Deutschland Holding AG ("KDG") and to
appoint Martin Schommer of Constantin GmbH as special auditor.

According to the court decision of June 9th 2016, Mr. Schommer, who
undertook the first special audit, is to conduct an additional special
audit, extending the scope of examination to any actions and measures taken
by the company beyond March 31st 2013. The ruling allows the special
auditor to independently continue to examine possible breaches of duty by
the KDG management board in the course of the takeover by Vodafone, and to
further confirm the findings of the first special audit, limited to the
period ending March 31st 2013. The court ruling allows the special auditor
to start his work with immediate effect.


In conjunction with the court decision, an Elliott legal adviser made the
following statement:

'We strongly welcome the decision of the regional court in Munich. Kabel
Deutschland, which is controlled by Vodafone via a Domination Agreement,
has attempted for many years to obstruct the course of justice and to
prevent disclosure of the real events that took place at the company in
connection with its takeover by Vodafone.'

Franck Tuil, Senior Portfolio Manager at Elliott, said:

'It is likely that the incremental cost to be borne by Vodafone will be in
the billions of euros. Using the mid-point of KDG's own internal valuation
the total cost per share to Vodafone, after interest has been taken into
consideration is EUR188, an increase of EUR1.4 billion over the cost
currently estimated by the market.'


The first special auditor's report was published by Kabel Deutschland in
December 2014 and examined the behavior of the KDG management and
Supervisory Board before the public takeover by Vodafone in October 2013.

Amongst other findings, the special auditor, who only examined the period
until March 31st 2013, concluded that:

- The internal enterprise valuation carried out by KDG and its investment
banks was EUR109.5 to EUR150.5 per share, significantly higher than the
price which was offered by Vodafone during the takeover and which was
recommended to shareholders by the management and Supervisory Board of KDG.

- In light of this internal valuation, the joint statement of the
management board and Supervisory Board of KDG recommending the KDG
shareholders to accept Vodafone's offer price is implausible.


In its initial motion, Elliott had also called for the appointment of a
second special auditor to examine the alleged obstructions of the special
auditor in the course of the first special audit. The court has decided
that this is not necessary since in the conviction of the court, the
special auditor has already described where and how his work has been
obstructed during the first special audit, so that these facts do not need
to be investigated by a separate audit. The court also stated that in its
conviction, if shareholders wished to initiate proceedings for recovery of
damages, they could do so without additional information, as the alleged
relevant breaches of duty on which such claims would be based are known.

In the Extraordinary General Meeting of KDG on March 20th 2015, Elliott's
proposal for two additional special audits on the behavior of the KDG
management in connection with the takeover by Vodafone was voted down by
the voting majority of Vodafone, even though almost all of the attending
minority shareholders voted in favor of additional special audits. In
response, Elliott called upon the ruling of the Munich regional court that
has now confirmed the necessity of further investigations.



About Elliott

Elliott Management Corporation manages two multi-strategy hedge funds which
combined have more than $28 billion of assets under management. Its
flagship fund, Elliott Associates, L.P., was founded in 1977, making it one
of the oldest hedge funds under continuous management. The Elliott funds'
investors include pension plans, sovereign wealth funds, endowments,
foundations, funds-of-funds, high net worth individuals and families, and
employees of the firm.


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Media Contact: 

Charles Barker Corporate Communications
Thomas Katzensteiner / Tobias Eberle
+49 69 79 40 90 25
+49 69 79 40 90 24
Thomas.Katzensteiner@charlesbarker.de
Tobias.Eberle@charlesbarker.de


End of Media Release

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Issuer: Elliott Advisors (UK) Limited
Key word(s): Finance

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