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Kabel Deutschland and Vodafone sign domination and profit and loss transfer agreement

The management board of Kabel Deutschland has signed a domination and profit and loss transfer agreement pursuant to section 291 of the German Stock Corporation Act between Kabel Deutschland as the controlled entity and Vodafone Vierte Verwaltungs as the controlling entity.

Vodafone Vierte Verwaltungs currently owns 76.57 per cent of the shares of Kabel Deutschland.
The domination and profit and loss transfer agreement still requires the approval by the extraordinary general meeting of Kabel Deutschland which is scheduled to take place in Munich on 13 February 2014.
In the agreement, Vodafone Vierte Verwaltungs offers to acquire the shares of the minority shareholders of Kabel Deutschland for a cash compensation pursuant to section 305 AktG in the amount of EUR84.53 per share. The cash compensation corresponds to the volume-weighted average stock market price of Kabel Deutschland shares as determined by the German Federal Financial Supervisory Authority (BaFin) for the relevant three-month period up to and including 12 September 2013.
Vodafone has announced that the minimum acceptance threshold had been met and its intention to enter into a domination and profit and loss transfer agreement with Kabel Deutschland.
The applicable reference share price for the cash compensation is higher than the business value per Kabel Deutschland share as determined in an independent evaluation of Kabel Deutschland carried out by the auditors Warth & Klein Grant Thornton in accordance with IDW Standard S1. It is also slightly higher than the price offered by Vodafone Vierte Verwaltungs within the context of its public takeover offer.
The domination and profit and loss transfer agreement also provides for an annual recurring compensation payment pursuant to sec. 304 AktG in the gross amount of EUR3.77 (EUR3.17 net based on the current taxation) per share.
These payment obligations by Vodafone Vierte Verwaltungs under the domination and profit and loss transfer agreement are secured by a comfort letter issued by Vodafone Group Plc.

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