"Mannesmann AG of Germany and Vodafone AirTouch Plc inched closer to an agreement in what
has been a hostile $164.9 billion takeover offer by the U.K. company, people familiar with the discussions said.
"Mannesmann Chief Executive Klaus Esser and Vodafone CEO Chris Gent had a brief conversation over the weekend and are expected to talk again this week, the people said. Mannesmann shareholders have until next Monday to decide on Vodafone's offer.
"While progress has been made, there is still a way to go. Germany's biggest mobile phone company has said it would accept as little as 52 percent of the combined company, down from the 58.5
percent it demanded earlier, the people said. Gent, meanwhile, told analysts on a conference call that he won't give Mannesmann 50 percent or more of a merged entity.
"Vodafone's current offer would give the German company's shareholders 47.2 percent of the combined group. ``Mannesmann is just protecting shareholders' interests, which it is entitled to do,'' said Michael Nicol, a fund manager
at Edinburgh-based Scottish Value Management, which holds stock in Vodafone and Mannesmann. ``I have said all along that this deal will happen because Vodafone needs it to happen.''
"Mannesmann is under pressure to seek better terms after Vodafone at the weekend announced an alliance with Vivendi SA, squelching the German company's hopes of swaying investors to its
side by striking its own deal with the French utility and media business.