Liberty Global not to raise bid for Kabel Deutschland, clears Vodafone’s path
17 Jul 2013
US cable operator Liberty Global Inc has said that it will not raise its bid for Germany's Kabel Deutschland Holding AG, clearing the path for Vodafone Group to go ahead with its $10-billion buyout offer.
John Malone, the billionaire chairman of Liberty, told Bloomberg yesterday in an interview that he would not get into a bidding war with the British telecoms group, but instead focus on opportunities in southern Europe.
"Unfortunately, the Vodafone guys have preempted us in trying to consolidate the rest of Germany," Malone said in the interview.
In Mid-June, Kabel confirmed media speculation that it had received a proposal from Liberty Global but did not disclose the offer price, although reports had earlier said that Liberty offered about €83 a share. (See: Liberty Global tables preliminary bid for German cable operator Kabel Deutschland)
London-based Vodafone, which has been in talks with Kabel and had made an indicative offer of €80 to €82 per share, raised its bid to €87 a share, valuing Germany's biggest cable operator at around €7.5 billion ($10 billion).
Last month, Kabel's board said it would recommend Vodafone's €7.5-billion offer which includes debt of around €£2 billion.
By acquiring the biggest cable provider in Germany, Vodafone would add 8.5 million connections and bring in fixed-line services to its mobile offerings.
KD offers digital, high definition (HD) and analog TV, Pay TV and DVR offerings, Video on Demand, broadband and fixed-line phone services via cable as well as mobile services.
The publicly-listed company operates cable networks in 13 German federal states and supplies its services to approximately 8.5 million households.
The company has approximately 3,500 employees, market capitalisation of €7 billion, and annual turnover of €1.7 billion.
Vodafone emerged as a market leader in mobile in Germany following its huge, £112 billion merger with Mannessmann in 2000.
Liberty Global, which operates in Germany under the Unitymedia Kabel BW brand, is the second-largest cable operator in the country. An offer from Unitymedia would have anyway come under intense scrutiny from competition authorities.
Liberty Global had recently acquired UK's Virgin Media in a $15.8 billion cash and stock deal, and a 12.65 per cent stake in Dutch cable TV operator Ziggo NV from Barclays Capital Securities Limited, for a total investment of approximately €632.5 million.
