Mannesmann, Germany's second-largest telephone operator, is to vote Thursday on a takeover bid by Vodafone AirTouch (quote: VOD), the world's largest mobile phone service provider, according to reports from Dow Jones Newswires and Bloomberg. But a Vodafone spokesman said earlier reports of a completed agreement were "pure speculation". The companies have made no formal announcement. Earlier reports held that Mannesmann had already agreed on the Vodafone takeover. Under the proposed deal, Mannesmann would hold 49.5 percent of the combined group, reports said. The original offer had the German group holding less than 48 percent. Mannesmann's CEO Klaus Esser would leave the company as part of the agreement, according to Dow Jones. Mannesmann's supervisory board is meeting Thursday afternoon to consider the agreement, Dow Jones reported. The merger would take the form of a $198.9bn stock swap that would be the biggest deal in history, eclipsing AOL's proposed takeover of Time Warner, Bloomberg reported, citing sources familiar with the companies. Vodafone would pay 59 of its own shares for each Mannesmann share, valuing the transaction at E372.88 per Mannesmann share, roughly a 15 percent premium on Mannesmann's share value as of Wednesday, according to Bloomberg. Vodafone and Mannesmann, its European partner, have been locked in a hostile takeover battle for three months, sparked by Mannesmann's decision to buy Orange, one of Vodafone's chief mobile-phone rivals in the UK. Earlier Thursday the companies acknowledged they were holding talks on turning the hostile bid friendly. In mid-afternoon trading Vodafone shares were down about 34 to 351p on the London exchange, while Mannesmann was down 3 percent in Frankfurt. Shares in Paris surged following reports of the deal, which may involve French telco Vivendi. More details to follow. What do you think? Tell the Mailroom. And read what others have said. See techTrader for more technology investment news, plus quotes and research.