Exclusive - Vodafone reaches preliminary deal to buy Spain's Ono: sources

Fri Mar 7, 2014 12:41pm EST
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By Andrés González and Julien Toyer

MADRID (Reuters) - British telecoms group Vodafone (VOD.L: Quote) has reached a preliminary deal to buy Spanish cable group Ono after raising its initial bid for the company, two people with knowledge of the discussions said on Friday.

The private equity-backed Ono, which sells fixed and mobile phone, TV and internet services, rebuffed an earlier bid from Vodafone in February and decided to go ahead with a planned initial public offering that would value the company at 7 billion euros ($9.6 billion), including debt.

Sources said Vodafone's bid would have to be substantially higher than that value to persuade Ono and its private equity shareholders to drop the listing.

"A meeting took place yesterday between the shareholders and (Vodafone Chief Executive) Vittorio Colao. The due diligence will start this weekend in order to make the offer binding," said one of the sources.

A second source said Ono's private equity shareholders told Vodafone at the meeting that the offer would have to come before March 13, when the cable group is due to formally go ahead with the plan to list on the Madrid stock exchange.

Both Ono and Vodafone declined to comment.

Ono has 1.9 million customers on its cable network that covers 70 percent of Spain, or 7.2 million households out of a total of 16 million.

Having built the network later than other cable and telecom companies, Ono boasts of having broadband speeds of up to 200 megabits per second, or up to 20 times the average speeds of rival networks.   Continued...

The headquarters of Vodafone Germany are pictured in Duesseldorf September 12, 2013. REUTERS/Ina Fassbender