Liberty Global unlikely to raise Kabel Deutschland bid

03 July 2013 | Kavit Majithia


Liberty Global is reportedly unlikely to raise its offer to acquire Kabel Deutschland after UK operator Vodafone struck a deal to acquire the company.

According to sources close to Bloomberg, Liberty has recognised the challenges its bid will face, including antitrust issues, and the company has reportedly claimed Vodafone is paying more than it should for the deal. It has however not made a final decision.

Vodafone has struck a deal to acquire Kabel Deutschland for approximately €7.7 billion, at €87 per share, after Liberty had valued the company at €85 per share.

Liberty already owns Germany’s second largest cable operator after combining Unitymedia and Kabel Baden-Wuerttenberg GmbH last year, and the company believes regulators could be wary about John Malone’s cable group gaining too much power in the market.

Vodafone’s offer also represents an all cash bid, whereas Liberty had proposed a complex structure to invest Malone’s cable assets into Kabel Deutschland, and Kabel’s board is now set to recommend Vodafone’s offer. The deal, if completed, would represent the second largest takeover a telecoms network in Europe this year, according to Bloomberg.

Analysts have claimed German regulators have welcomed Vodafone’s bid, as mobile operators continue to look into fixed-line assets to leverage smartphone adoption in the market and cope with increasing high-bandwidth demand.