British telco Vodafone Group has made an all-cash binding offer of €6.9bn (US$5.7bn) for Spanish cableco Ono including debt, sources close to the process told Spanish newspaper Expansion.
Ono’s board is set to meet tomorrow to discuss the interest…
British telco Vodafone Group has made an all-cash binding offer of €6.9bn (US$5.7bn) for Spanish cableco Ono including debt, sources close to the process told Spanish newspaper Expansion.
Ono’s board is set to meet tomorrow to discuss the interest and the alternative option of pursuing an IPO, which has been in the works for some time.
Vodafone’s bid is reported to be attractive to Ono’s controlling shareholders – investment firms including Providence Equity Partners, Thomas H. Lee, CCMP and Quadrangle – as it would return €1.88bn on their €1bn investment made in 2005.
European cableco Liberty Global has also held talks with the firms, according to a report from the end of January.
Yet smaller shareholders are said to feel that an IPO could yet offer better value, with Vodafone’s proposal below the 9.5x EBITDA multiple average for European cable acquisitions.
Vodafone and Ono both declined to comment on the report.
Spanish consumers are continuing to cut back their spending and in Ono’s third quarter results the company recorded subscriber losses, which it blamed on a “challenging macroeconomic environment” and “tough market competition”.
Vodafone’s Spanish mobile unit has also been suffering, haemorrhaging customers to budget rivals. An acquisition of Ono would allow it to offer quad-play services and rival Telefonica’s Movistar Fusion package.
In the second half of last year, Vodafone bought Kabel Deutschland, and is now scouring Europe for more cable targets in markets where it operates mobile services. Its sale of a minority stake in Verizon Wireless is set to complete later this month, which leaves the operator with a sizeable war chest to spend on acquisitions.
Liberty Global has even been mentioned as an acquisition target for Vodafone, although a merger could raise antitrust questions in markets such as Germany.
