UK mobile giant Vodafone is reportedly eyeing Italian telco Fastweb as well as German cableco Kabel Deutschland (KDG).
Vodafone, which aims to offer unified services in Europe, has Swisscom-owned Fastweb on a list of potential takeover targets on the…
UK mobile giant Vodafone is reportedly eyeing Italian telco Fastweb as well as German cableco Kabel Deutschland (KDG).
Vodafone, which aims to offer unified services in Europe, has Swisscom-owned Fastweb on a list of potential takeover targets on the continent, Bloomberg reported citing unnamed people familiar with the matter. The UK operator is assessing options to acquire faster-growing investments in Europe.
Vodafone has already made two informal approaches in 2011 and this year for Fastweb, Italy’s largest alternative fixed-line provider, but they were rejected by Swisscom, the report cited two sources as saying.
Spokespeople for Swisscom and Fastweb declined to comment. Vodafone has also declined to comment.
Bernstein Research analysts estimate Fastweb to be worth around €3bn (US$4bn). Its key attractions to Vodafone are likely to be its approximate 220km FttP connections in two northern Italian cities and a 11% stake in Metroweb, which state-controlled lender Cassa Depositi e Prestiti (CDP) is also invested in.
The Bernstein analysts said that if Vodafone buys Fastweb for €3bn and KDG for €11bn (a price they predict the asset may command), it will be at the limit of its target debt range of 2.7x EBITDA. This, together with a recent refinancing, suggest Vodafone would be less likely to target Spanish cableco Ono, leaving it very exposed in Spain, they said.
Vodafone confirmed on Wednesday (12 June) that it has approached KDG about a potential offer for the company which, based on its trading price of €81.02 per share at the time of writing, is valued at nearly €7.2bn (US$9.6bn).
While Vodafone is currently focussed on the potential KDG deal, it is looking at other opportunities to invest the proceeds of the eventual sale of its 45% stake in US mobile joint venture Verizon Wireless, the Bloomberg report claimed. Vodafone’s partner in the venture, Verizon Communications, has repeatedly said it would like to buy Vodafone’s share of the business, estimated to be worth between US$100bn and US$140bn.
Milan-based Fastweb, acquired by Swisscom in 2007, claimed to have 1.9 million customers in May. The company reported revenues of €1.613m for 2012 and EBITDA of 500m. Fastweb is working to expand its fibre-optic infrastructure, aiming to reach 20% of the Italian population by 2014.
