Assessment of United Internet’s offer to acquire additional 9.19% shares in 1&1
I find the rationale provided by management for acquiring the additional 9.19% stake in 1&1 to be a bit unconvincing. While United Internet already holds a controlling majority and can effectively pass shareholder resolutions, the explanation that the acquisition is solely intended to “stabilize” the shareholder structure raises questions.
In my view, the synergies referenced by analysts are more likely to be fully realized under a Domination and Profit and Loss Transfer Agreement (DPLTA) or a squeeze-out . A DPLTA requires 75% voting rights—already achieved—while a squeeze-out requires 90% (via merger) or 95% (post-DPLTA).
By increasing its stake to 90%, United Internet may be positioning itself for one of these outcomes in the medium term. If a squeeze-out were to occur, minority shareholders could be exited before the full value of 1&1’s Open RAN strategy is realized— a process I estimate could take 2-5 years.
As such, the possibility of a squeeze-out could affect the investment appeal of 1&1 shares for long-term holders?