Liberty Global Plc made a preliminary offer for Kabel Deutschland Holding AG, pitting the cable company controlled by John Malone against Vodafone Group Plc for control of Germany's largest cable provider.
Liberty Global made an offer for Kabel Deutschland, the Munich-based company said in a statement late yesterday without disclosing the price. Liberty offered about euro 85 a share, according to a person familiar with the talks. The offer values the company at euro 7.5 billion and consists of shares and cash, said the person, who asked not to be identified because the discussions are private.
Kabel Deutschland's management, led by CEO Adrian von Hammerstein, favours Vodafone's latest bid of euro 83, which is all cash and may have better chances of being approved by Germany's Federal Cartel Office, the person said.
"This is probably a tactical offer to push up the price and make it more difficult for Vodafone," said Heike Pauls, a Frankfurt-based analyst at Commerzbank AG. "Liberty is aware that the cartel office would at best approve their deal under very tough conditions."
Antitrust concerns
Kabel Deutschland was blocked by the antitrust regulator from buying Berlin-based cable operator Tele Columbus Group in February. Liberty, which entered the German market with the acquisition of Unitymedia in 2010, was forced to take steps like removing encryptions and opening up contracts with housing associations to rivals when it added operator KabelBW the following year to form country's second-largest cable operator.
Shares in Kabel Deutschland have climbed 30 per cent since Vodafone's interest in the company first surfaced on February 13 through yesterday. They rose as much as 4.3 per cent to euro 86.02 and were up 3.4 per cent as of 9:26 am in Frankfurt.
Vodafone will probably offer as much as euro 90 following Liberty's bid, Sanford C. Bernstein analyst Robin Bienenstock said in a note today.
Vodafone rose almost 0.4 per cent to 183.35 pence in London. Liberty Global shares fell 2.2 per cent to $72.03 in New York yesterday.
Marcus Smith, a spokesman for Liberty Global, declined to comment beyond the statement made by Kabel Deutschland.
Vodafone spokesman Simon Gordon declined to comment.
Telecommunications companies have commanded a 27 per cent takeover premium in the past 12 months, according to data compiled by Bloomberg based on the average of 27 acquisitions valued at more than $1 billion. SoftBank Corp's pending deal for Sprint Nextel Corp. would be the largest this year.
The Japanese company's latest offer for Sprint is $21.6 billion for a 78 per cent stake.
Liberty Global made an offer for Kabel Deutschland, the Munich-based company said in a statement late yesterday without disclosing the price. Liberty offered about euro 85 a share, according to a person familiar with the talks. The offer values the company at euro 7.5 billion and consists of shares and cash, said the person, who asked not to be identified because the discussions are private.
Kabel Deutschland's management, led by CEO Adrian von Hammerstein, favours Vodafone's latest bid of euro 83, which is all cash and may have better chances of being approved by Germany's Federal Cartel Office, the person said.
More From This Section
A new owner would gain 8.5 million paying households and potential customers for combined landline, mobile and TV subscriptions in Europe's biggest telecommunications market.
"This is probably a tactical offer to push up the price and make it more difficult for Vodafone," said Heike Pauls, a Frankfurt-based analyst at Commerzbank AG. "Liberty is aware that the cartel office would at best approve their deal under very tough conditions."
Antitrust concerns
Kabel Deutschland was blocked by the antitrust regulator from buying Berlin-based cable operator Tele Columbus Group in February. Liberty, which entered the German market with the acquisition of Unitymedia in 2010, was forced to take steps like removing encryptions and opening up contracts with housing associations to rivals when it added operator KabelBW the following year to form country's second-largest cable operator.
Shares in Kabel Deutschland have climbed 30 per cent since Vodafone's interest in the company first surfaced on February 13 through yesterday. They rose as much as 4.3 per cent to euro 86.02 and were up 3.4 per cent as of 9:26 am in Frankfurt.
Vodafone will probably offer as much as euro 90 following Liberty's bid, Sanford C. Bernstein analyst Robin Bienenstock said in a note today.
Vodafone rose almost 0.4 per cent to 183.35 pence in London. Liberty Global shares fell 2.2 per cent to $72.03 in New York yesterday.
Marcus Smith, a spokesman for Liberty Global, declined to comment beyond the statement made by Kabel Deutschland.
Vodafone spokesman Simon Gordon declined to comment.
Telecommunications companies have commanded a 27 per cent takeover premium in the past 12 months, according to data compiled by Bloomberg based on the average of 27 acquisitions valued at more than $1 billion. SoftBank Corp's pending deal for Sprint Nextel Corp. would be the largest this year.
The Japanese company's latest offer for Sprint is $21.6 billion for a 78 per cent stake.