FRANKFURT, Germany -- Mannesmann AG reversed its opposition to talks with Vodafone AirTouch PLC yesterday and began to consider a face-saving friendly merger, executives close to the talks said.
The executives said there was a growing feeling within Mannesmann that the company could not defeat the $156 billion hostile takeover bid from Vodafone, especially after Vivendi SA, historically an ally of Mannesmann, joined an alliance with Vodafone on Sunday.
While advisers to Mannesmann and Vodafone already have been in contact, the talks are now expected to intensify, the executives said. "There is greater likelihood of a friendly deal now," one executive said.
Mannesmann also is ready to accept a lower stake in the combined company, the executives said, though it is still not ready to accept Vodafone's current proposal.
But Vodafone, increasingly confident that it will capture a majority of Mannesmann shares by the time its offer expires Monday, has yet to raise its offer, and people on both sides were skeptical that it would do so.
Klaus Esser, Mannesmann's chief executive officer, has insisted that he would reject any offer in which the German company's shareholders ended up with less than 58.5 percent of the shares in the combined entity. Vodafone's current offer would give them 47.2 percent, though Vodafone has offered to raise that share to about 49 percent if Esser agrees to a friendly deal.