German cableco Kabel Deutschland (KDG), has reportedly won the bidding for fellow local operator Tele Columbus, beating rival Deutsche Telekom, according to a Financial Times Deutschland report which did not reveal its sources.
KDG and Tele…
German cableco Kabel Deutschland (KDG), has reportedly won the bidding for fellow local operator Tele Columbus, beating rival Deutsche Telekom, according to a Financial Times Deutschland report which did not reveal its sources.
KDG and Tele Columbus declined to comment.
Tele Columbus shareholders, comprised of funds including York Capital and Golden Tree Asset Management, mandated Rothschild to organise the sale and, according to the report, were asking for around €600m for the company.
A banker familiar with the German cable industry told TelecomFinance in April that KDG was aware a Tele Columbus takeover would present antitrust issues and that it would have to offer divestments to appease regulators.
With reference to market observers, today’s FT Deutschland article stated that KDG will need to offer remedies to the German antitrust regulator.
KDG has long reiterated the opinion that further consolidation within the German cable sector would benefit both the sector and consumers.
In late March, when reports that KDG was eyeing Tele Columbus as a takeover target first emerged, Espirito Santo telecoms analyst Andrew Hogley described KDG as the “natural strategic buyer” for Tele Columbus which, according to its website, services about 2.1 million households.
Hogley said that, while Tele Columbus has net debt in the vicinity of €600m to €650m, KDG could justify paying up to €700m for it, a key reason being that about a million Tele Columbus customers are within KDG’s footprint area.
Hogley also said such a takeover would come up against regulatory hurdles, pointing out that there are significant differences between it and Unitymedia’s approved takeover of Kabel BW last year.
