Liberty Global Looks To Trump Vodafone For Stake In Ono

By Mani
Updated on

John Malone’s Liberty Global plc (NASDAQ:LBTYA) and Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) are competing to acquire Spain’s largest cable operator Ono from private equity owners.

Vodafone, Liberty Global are in talks

Anne-Sylvaine Chassany and Daniel Thomas of Financial Times reports industry icon John Malone looks to trump Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) in the race for cable acquisitions across Europe. Both Liberty and Vodafone are holding talks with the private equity owners of Ono, which is separately working on floatation in Madrid this year.

However, talks have not reached a point where offers were presented to, or discussed by Ono’s board of directors and the Spain’s cable operator is still pursuing its IPO.

Liberty Global’s attempt on top of its recent Ziggo bid

On Monday, it was reported that Liberty Global plc (NASDAQ:LBTYA) has clinched a takeover of Ziggo NV (AMS:ZIGGO) (OTCMKTS:ZIGGY) in a cash-and-stock deal valuing Ziggo at about 10 billion euros, to cement Liberty’s dominance in Europe’s cable industry.

Liberty Global plc (NASDAQ:LBTYA), which owned 28.5% of Ziggo NV, bought Virgin Media Inc. (NASDAQ:VMED) (LON:VMED), earlier last year for $16 billion and made an offer on Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) (OTCMKTS:KBDHF) though it was outbid by Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD).

Liberty’s Ziggo NV (AMS:ZIGGO) (OTCMKTS:ZIGGY) deal will combine Liberty Global’s existing Dutch operations, UPC Netherlands, with Ziggo’s business creating a combined company with €2.5 billion in annual revenues. UPC Netherlands is the second-largest cable provider in the Netherlands.

Continent dominating pay TV empire

According to Ovum telecommunications analyst Steven Hartley: “Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) has a cash stockpile and Liberty has a stated acquisitions strategy.  As cable opportunities arise in Europe, they will be the usual suspects”.

With Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) reportedly out from under the shadow of a potential acquisition and flush with funds after its Verizon Wireless assets divestiture, is looking to acquire Spain’s Grupo ONO SA if and when it comes up for an IPO.

Both Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) and Liberty Global plc (NASDAQ:LBTYA) are looking to chase growth. Europe’s cable and satellite operators are expected to grow about 15% on average this year, driven by acquisitions, according to data compiled by Bloomberg industries. 

According to Claire Enders, owner of Enders Analysis in London, Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD)’s interest in Ono is seen as a strategic move, since the company already owns a mobile-phone network there, while Liberty Global plc (NASDAQ:LBTYA)’s interest would be more financial and a buyout would depend on whether Ono would boost earnings.

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