Vodafone has reportedly resumed talks with German cableco KDG about a potential takeover.
The UK-based mobile operator was said to have postponed plans to make a bid for KDG in February, after leaks of the news disrupted internal talks.
However,…
Vodafone has reportedly resumed talks with German cableco KDG about a potential takeover.
The UK-based mobile operator was said to have postponed plans to make a bid for KDG in February, after leaks of the news disrupted internal talks.
However, articles in the German and the US edition of the Wall Street Journal cited unidentified people familiar with the matter as saying Vodafone is reconsidering a takeover of the German cableco, likely to command a price of at least €6.3bn (US$8.3bn). One source claimed that the companies met recently to discuss such a deal and another said Vodafone has yet to decide whether to proceed with a bid.
Vodafone declined to comment on the matter.
Vodafone Germany’s recently-signed network access agreement with Deutsche Telekom (DT), which will enable it to provide German customers with high-speed fixed-line broadband and IPTV, prompted speculation that the UK operator would not go ahead with a bid for KDG. The agreement with DT enables Vodafone, which has about 34 million customers in Germany, to offer fixed-line services without owning a network.
In contrast to many other analysts at the time news of the agreement broke, Comerzbank’s Heike Pauls argued that it did not alter the chances of Vodafone making a bid for KDG as, even if a takeover were successful, it would still need a bitstream agreement for subscriptions falling outside KDG’s footprint. However, Pauls predicted Vodafone would not make a bid in the short term given the high multiples and regulatory risk involved.
In April, German weekly Manager Magazin reported that US cable giant Liberty Global, which owns Cologne-based UnitymediaKabelBW, was working on an offer for KDG.
KDG reported revenues of €1.36bn for the nine months ended 31 December 2012, EBITDA of €643m and an EBITDA margin of 47.2%
Meanwhile, US-based Verizon Communications is seeking to buy out Vodafone’s 45% in their joint venture Verizon Wireless.
KDG’s shares, which closed at €72.71 yesterday, traded above the €74.00 mark most of today, peaking at €74.95 during early trading.
