It’s Vodafone Vs. Liberty Global In Multi-Billion-Euro Bid For German Cable TV Operator Kabel Deutschland

on June 18 2013 7:29 AM

British mobile services provider Vodafone Group plc (LON:VOD) could end up in a bidding war for Kabel Deutschland Holding AG (FRA:KD8) after reports emerged that Liberty Global PLC (Nasdaq:LBTYA) is tossing its hat in the ring for Germany’s largest cable TV company.

Vodafone, the world’s second largest mobile communications company by revenue and number of subscribers, was already expected to raise its initial offer in what’s considered an unusual move for a company devoted primarily to mobile communications.

Now that it may face a viable contender in Liberty, which completed its $24 billion purchase of entertainment and communications company Virgin Media earlier this month, Vodafone could find itself paying even more than the additional sum it was expected to offer to sweeten the deal. Neither bidder has publicly disclosed how much they’re offering, but the BBC said in a report on Tuesday that analysts think Vodafone has bid €7.2 billion ($9.6 billion) and that Liberty has raised the ante to €7.5 billion ($10 billion).

However, the Sunday Times had reported over the weekend that Vodafone would have to offer €8 billion in cash and take on €3 billion in the Germany company’s debt just to acquire access to Kabel Deutschland's books to start the due diligence process. If the Times report and the BBC figures are accurate, then Liberty’s offer is too low.

If Vodafone ends up owning the German company, it would be its largest acquisition yet and could harken a bargain hunting buying spree on the continent for the British telecom.

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