July 24, 2017

DealBook: Battle Heating Up Over German Cable Operator

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LONDON – John C. Malone is picking a fight with Vodafone in Europe.

Less than a week after Vodafone of Britain said it had approached the German cable operator Kabel Deutschland over a potential takeover, Mr. Malone’s Liberty Global is now trying to muscle in on the action.

Any deal for Kabel Deutschland, Germany’s largest cable company, would probably exceed $10 billion, and represent one of the largest European acquisitions this year.

The fight for control over Kabel Deutschland, whose shares rose in early morning trading in Frankfurt but gave up the gains by the afternoon, is the latest in a number of deals in Europe’s cable and telecommunications sector over the last 18 months.

Liberty Global, which already owns Germany’s second-largest cable company, bought the British company Virgin Media for $16 billion this year as part of its European expansion.

Others international players, including the Mexican billionaire Carlos Slim Helú, have also been picking up assets, and media reports from Spain claimed on Monday that ATT had been thwarted in a potential $70 billion takeover approach for the Spanish company Telefónica.

Telefónica denied that it had been in contact over a potential deal.

As both Vodafone and Liberty Global vie to acquire Kabel Deutschland, analysts say the winner may have to pay as much as $10.7 billion for the company, which has 8.5 million customers across Germany.

For Vodafone, the move would help to add cable services to its existing cellphone and fixed-line operations in Germany. In contrast, Liberty Global could consolidate its current local cable business, while also challenging competition from the likes of Deutsche Telekom.

“There’s more strategic value for Liberty doing a deal,” Andrew Hogley, a telecommunications analyst with Espírito Santo in London. “Liberty has a stronger appetite for this type of business.”

UBS and Goldman Sachs are advising Vodafone, while Morgan Stanley and Perella Weinberg Partners are advising Kabel Deutschland.

Article source: http://dealbook.nytimes.com/2013/06/18/battle-heating-up-over-german-cable-operator/?partner=rss&emc=rss

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