UPDATE 1-Ono board clears stock market plan, defers Vodafone offer

Tue Feb 11, 2014 3:02pm EST
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* Ono board agrees to pushes ahead with IPO plans -source

* Firm will carry out capital hike, sell existing shares

* But board did not discuss formal Vodafone offer -source

By Andrés González and Kate Holton

MADRID/LONDON, Feb 11 (Reuters) - Directors of Spain's largest cable operator, Ono, on Tuesday agreed to push ahead with their plan to list the company on the stock market and deferred a takeover approach from Britain's Vodafone, a source with knowledge of the matter said.

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.

The source, who had been briefed on the board's discussions, said the directors had agreed on a plan to first carry out a capital increase of 800 million euros and later sell existing shares for a total amount of at least 200 millions euros.   Continued...