Kabel Deutschland (KDG) has given up hope for a takeover of smaller counterpart Tele Columbus, following opposition from the Federal Cartel Office (FCO).
The regulator informed KDG yesterday that it still intends to block the proposed deal, despite the…
Kabel Deutschland (KDG) has given up hope for a takeover of smaller counterpart Tele Columbus, following opposition from the Federal Cartel Office (FCO).
The regulator informed KDG yesterday that it still intends to block the proposed deal, despite the remedies offered by the companies earlier.
According to KDG the FCO takes the view that the undertakings offered in January – which included the disposal of Tele Columbus’ assets in the German cities of Dresden, Berlin, and Cottbus – are insufficient.
KDG said offering additional measures requested by the regulator would be “commercially not reasonable”.
KDG – Germany’s second largest cableco behind Liberty Global’s Unitymedia – said it will “continue to pursue its strong organic growth strategy.”
KDG, which is rumoured to be targeted by British mobile operator Vodafone, is due to publish results tomorrow. Recent reports suggested that Vodafone will decide whether or not to bid for the cableco following the publication of the results. Meanwhile newswires reported that KDG has hired Morgan Stanley and Perella Weinberg to advise on a potential approach form Vodafone. The latter is advised by Goldman Sachs, according to Reuters.
Analysts at Bernstein suggested the failure to take over Tele Columbus made the situation for Vodafone more difficult. “[Vodafone] could do nothing or buy an expensive partial solution. If Vodafone buys KDG now they will need fibre wholesale and ULL [Unbundled Local Loop] outside of KDG’s footprint, keeping wireline prices high,” they wrote in an investor’s note.
Since first rumours of Vodafone’s interest were reported, KDG’s share price has risen considerably form its closing price of €63.53 on 12 February. Today, KDG traded around the €70 mark.