Kabel Deutschland Holding AG’s board advised shareholders to accept Vodafone Group Plc’s 7.7 billion-euro ($10.2 billion) offer, clearing the way for the third-largest European telecommunications deal this year.
The 87-euro-per-share price, which includes a 2.50 euro dividend payment, is “fair from a financial point of view” and the deal will strengthen both companies, Kabel Deutschland’s supervisory and management boards said today in a statement.
Kabel Deutschland, Germany’s biggest cable company, is a key part of Vodafone’s plan to expand outside of wireless service. Vodafone said yesterday that it will reorganize by combining its northern and southern European units to make it easier to sell packages of phone, Internet and television across the continent. Vodafone had to fend off competing offers from John Malone’s Liberty Global Plc which is also pursuing a combined-services strategy.
“After a full appraisal of the offer document, we consider the offer to be financially attractive and strategically promising,” Kabel Deutschland Chief Executive Officer Adrian Von Hammerstein said in the statement. “Kabel Deutschland and Vodafone complement each other ideally.”
Liberty Global’s $16 billion purchase of the U.K.’s Virgin Media Inc. is the largest telecommunications deal announced in Europe so far this year, followed by Telefonica SA’s 8.1 billion euro offer for Royal KPN NV’s E-Plus unit in Germany, according to data compiled by Bloomberg.
Vodafone, based in Newbury, England, has said it won’t make significant divestments of Kabel Deutschland’s assets or fire a large number of employees as part of the deal. Germany is Vodafone’s biggest market, accounting for about 18 percent of annual sales, according to data compiled by Bloomberg.
This week, Vodafone also received approval from Germany’s financial regulators to publish the details of its offer document. Shareholders have until Sept. 11 to decide on the bid. The companies aim to wrap up the deal following Kabel Deutschland’s Oct. 10 annual shareholder meeting, pending antitrust approval, people familiar with the matter have said.
Vodafone shares fell 0.2 percent to 199.80 pence at 10:02 a.m. in London. Kabel Deutschland was little changed at 84.58 euros on the Frankfurt exchange.