Liberty Global Submits Initial Offer To Takeover Kabel Deutschland

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Liberty Global Submits Initial Offer To Takeover Kabel Deutschland

Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) (OTCMKTS:KBDHF), the largest cable operator in Germany confirmed that iot received an initial takeover offer from  Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK), the U.S. cable company controlled by John Malone.

Liberty Global logo

Liberty Global’s Proposal Details Not Provided

The German cable operator did not provide any detail regarding the proposal submitted by Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK), and indicated it is uncertain whether a transaction will materialize between the two companies. A report from Financial Times cited that the U.S. cable company’s proposal for Kabel Deutschland was €85 per share. Based on the offer, the total acquisition price would be around €7.5 billion.

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Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) (OTCMKTS:KBDHF) has a market value of $9.8 billion (€7.3 billion). It has approximately 8.5 million customers, and 3,500 employees. Last year, the company posted €1.7 billion and €795 million adjusted EBITDA.

Vodafone’s Tender Offer

Last week, Vodafone Group Plc (LON:VOD) (NASDAQ:VOD), the leading mobile phone operator in United Kingdom also made a tender offer for Kabel Deutschland.  People familiar with the issue said that the UK-based mobile operator’s bid was €80 euros per share.

The report from Financial Times cited a comment from a source that Vodafone plans to increase its proposal to move forward its discussions with the German cable operator. Another person familiar with the situation said that Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) (OTCMKTS:KBDHF) indicated that it wants Vodafone Group Plc (LON:VOD) (NASDAQ:VOD) to offer a significant premium to its market value.

Rise In Stock Price Of Kabel Deutschland

The stock price of Kabel Deutschland increased by 30 percent since Vodafone expressed interest in assuming control of the German cable operator. Basil Petrides, analysts at Hartman Capital view Vodafone’s move as a defensive strategy against Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK), which already acquired Unitymedia and Kabel Baden-Wuerttemberg , both cable networks in Germany.

A related report from Nick Turner and Heather Harris cited that analysts believe that Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) could face obstacles from antitrust regulators in Germany given the fact that it already acquired Unitymedia and Kabel Baden-Wuerttemberg.

Vodafone Group Plc (LON:VOD) (NASDAQ:VOD) hired the services of Goldman Sachs Group, Inc. (NYSE:GS) to provide advice in order to close an agreement with Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) (OTCMKTS:KBDHF). The estimated cost of a possible deal would be around €10 billion. According to analysts, Vodafone needs to assume that €2.8 billion debt of the German cable operator.

The stock price of Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK) was down by more than 2 percent to $72,03 per share while the shares of Vodafone Group Plc (LON:VOD) (NASDAQ:VOD) closed at $28.56 per share after trading hours on Monday in New York.

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