Swedish private equity firm EQT is expected to decide today whether to list or sell Germany’s number three cableco Kabel BW, according to several media reports.
Last week, Kabel BW announced it was planning to list on the Frankfurt Stock Exchange in the…
Swedish private equity firm EQT is expected to decide today whether to list or sell Germany’s number three cableco Kabel BW, according to several media reports.
Last week, Kabel BW announced it was planning to list on the Frankfurt Stock Exchange in the first half of the year. EQT is advised by JP Morgan and Deutsche Bank, while BoA Merrill Lynch and RBS are acting as joint bookrunners for the IPO, Kabel BW said in a statement last Friday.
But it now seems that the cable company might still be sold to one of the three remaining bidders: US cable giant Liberty Global, which owns Germany’s second largest cableco Unitymedia, as well as private equity firms CVC and Hellman & Friedman.
EQT is reportedly asking for at least E3bn for Kabel BW. But Dow Jones cited people close to the matter who said that the final offers are unlikely to be above that price.
In addition, TelecomFinance understands that Liberty Global might struggle to consolidate Unitymedia and Kabel BW due to competition issues.
The Cartel Office, Germany’s regulator, told KDG in the past it was not allowed to merge with Kabel BW or Unitymedia on anti-trust grounds. The regulator’s main concern is believed to be on the content side rather than the distribution side.
Therefore, an IPO may ultimately be the exit chosen by EQT for Kabel BW given the successful precedent set by Germany’s largest cableco Kabel Deutschland (KDG).
About a year ago, PE firm Providence listed KDG in a E759m IPO, after it too had prepared to exit via a sale. Commenting on the KDG IPO during the Cable Congress, Marisa Drew, co-head of global markets solutions group at Credit Suisse, said: “Cable, in its current form, holds the most opportunity in terms of delivery speed format, products, functionality. This what investors are buying when they buy cable.
“I think we’ll see much more dual track IPO/sales that run side by side and we’ll see where the bids come in and ultimately a decision will be taken depending on who shows up to the party.”
