Vodafone moves for Kabel Deutschland in quad-play push

Wed Jun 12, 2013 11:58am EDT
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By Kate Holton and Peter Maushagen

LONDON/FRANKFURT (Reuters) - British mobile firm Vodafone is pursuing Kabel Deutschland after having an initial 7.2 billion euro ($9.6 billion) bid proposal knocked back by Germany's biggest cable operator, sources close to the matter said on Wednesday.

The world's second-biggest mobile operator has long been linked with a move for Kabel Deutschland, which operates in its most important European market and would help it to meet growing demand from customers for television, broadband, mobile and fixed-line services - so-called "quad play" - from one provider.

Vodafone sent a letter by email to Kabel Deutschland last week announcing its interest and indicating a price of 81 euros per share, three people familiar with the matter told Reuters.

That proposal, which was a 10 percent premium to last week's price, was deemed to be too low by Kabel Deutschland, four sources said, speaking on condition of anonymity,

Those sources said the talks were amicable - with the firms issuing identical statements to confirm the approach, without giving any details - suggesting further contacts were likely.

One Kabel Deutschland shareholder, who also declined to be named, said Vodafone's offer "must begin with a 9" euros per share, which would take it to about 8 billion euros.

Any deal, which would be Vodafone's largest since 2007, could help it better compete against mobile operators, which are cutting prices, and against the pan-European cable group Liberty Global, which has been on an acquisition spree.

Analysts said U.S. tycoon John Malone's Liberty Global could make a counterbid for Kabel Deutschland, though they added it would likely face greater regulatory scrutiny than Vodafone because it already owns Unitymedia in Germany.   Continued...

File picture shows employees of Germany's biggest cable operator, Kabel Deutschland, working in front of a monitor wall at the Kabel Deutschland playout centre in Frankfurt February 25, 2013. REUTERS/Lisi Niesner/Files