Vodafone is considering a bid for German cableco Kabel Deutschland (KDG), according to media reports.
German business publication Manager Magazin wrote that Vodafone’s management had discussed an offer for KDG, which is currently seeking antitrust…
Vodafone is considering a bid for German cableco Kabel Deutschland (KDG), according to media reports.
German business publication Manager Magazin wrote that Vodafone’s management had discussed an offer for KDG, which is currently seeking antitrust approval for the acquisition of smaller counterpart Tele Columbus.
A sector banker familiar with the German cable industry noted that Vodafone had previously considered a bid for the German cableco. But the plans, which date back to before KDG’s 2010 IPO, were dropped quickly following resistance from Vodafone’s shareholders.
Manager Magazin wrote renewed plans for a KDG bid were at an advanced stage, saying Vodafone Germany CEO Jens Schulte-Bockum and Vodafone head of strategy Warren Finegold were in favour of a bid. Group CEO Vittorio Colao was tilting towards approving a bid, the article stated.
Following the German media report KDG’s shares peaked at €72.75 in early morning trading, up 14.5% to yesterday’s close of €63.53. Shares later traded around €69.10, giving KDG a market cap of above €6.1bn.
The sector banker said KDG was the last major cable asset available for Vodafone in Europe. He believed a counter bid from strategic players to be unlikely, but did not rule out that private equity could take an interest.
Liberty Global is unlikely to bid as it would face significant antitrust hurdles. The US cableco owns Unitymedia, Germany’s largest cable operator, which in late 2011 received regulatory approval for the takeover of KabelBW subject to significant remedies to address antitrust concerns.
John Malone, chairman of Liberty Global, said in October 2012 that a merger of Liberty’s German assets with KDG would make sense, but he acknowledged that such a deal would likely be blocked by the competition authorities.
Earlier this month Liberty announced a US$23bn bid for UK-based Virgin Media. The deal, if successful, would be Malone’s first foray into Vodafone’s British heartland since his investment in Telewest, the company that merged with NTL in 2006.
KDG declined to comment; Vodafone did not reply to requests for comment.
