Liberty Buying Kabel Deutschland To Raise Serious Antitrust Issues

Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) has officially made an offer to buy the largest cable operator in Germany, Kabel Deutschland, for €7.7 billion ($10.1 billion). However, billionaire John Malone’s Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) is still evaluating all options to snatch the deal from British telecom giant.

Liberty Media

In the latest development, Germany’s Federal Cartel Office said that Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK)’s takeover attempt for Kabel Deutschland will be a lot more complicated. Regulators said that Liberty Global Plc (NASDAQ:LBTYA)’s offer will raise antitrust issues because it already owns the second biggest German cable operator Unity Media Kabel BW.

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In an initial offer, the U.S. cable company offered to pay €85 per share, valuing Kabel Deutschland at around €7.5 billion. However, Vodafone has offered to pay 87 euros a share. The British telecom operator said that Kabel Deutschland will operate as a separate legal entity after the acquisition. Moreover, Kabel Deutschland management will handle the responsibility of the Newbury, England-based company’s fixed line business in Germany.

Liberty Thinks a Counterbid Still Possible

However, Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) thinks that a counter offer is still possible if it opts for table one, people familiar with the matter told Bloomberg. The American company is likely to decide within a week whether to make a counterbid or walk away. Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) acquired the U.K.-based Virgin Media Inc. recently in a $16 billion deal. It has also made several other acquisitions in European region to strengthen its presence in countries like Germany, France, Austria, Belgium and Switzerland.

Vodafone Has The Right to Match

If any competitor, including Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK), makes a counter offer for Kabel Deutschland, Vodafone has the right to match, the British company said in a statement. Kabel Deutschland CEO Adrian von Hammerstein said in a statement that Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) is an ideal fit for the company.

Hammerstein said that his company hasn’t signed any agreement on compensation if the Vodafone deal falls apart. He said Kabel Deutschland hasn’t discussed any of the two offers with the Federal Cartel Office beforehand.

Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) shares were up 2.10 percent to $72.61 while Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) gained 0.95 percent to $28.27 at 3:16 PM EDT.