Ono board weighs Vodafone offer against stock market plan

Tue Feb 11, 2014 10:03am EST
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* Ono board expected to discuss IPO, Vodafone offer

* Combined entity would be strong competitor for Telefonica

* Analysts, investors say potential deal to top 7 bln euros

By Julien Toyer and Kate Holton

MADRID/LONDON, Feb 11 (Reuters) - Directors of Spain's largest cable operator Ono met on Tuesday to weigh up whether they should accept a takeover offer from Britain's Vodafone or push ahead with their original plan to list the company on the stock market.

Ono, which sells fixed and mobile phone, TV and internet services, had been preparing for a 7 billion euro ($9.6 billion) stock market sale to capitalise on high investor interest in European cable firms when the British telecoms operator approached its private equity owners about a takeover.

A combined entity, building on Vodafone's strength in mobile services and Ono's position in broadband internet and TV packages would offer the biggest challenge yet to Spanish market leader and former monopoly Telefonica.

In response to a five-year economic downturn, Telefonica has turned the market ultra competitive by folding the four services of mobile, fixed-line, broadband and pay-TV into one cheaper offering for cash-strapped consumers.

With one offer already rejected as too low by Ono, Vodafone is now having to decide how much it is willing to pay for a company that is no longer growing.   Continued...