Vodafone Begins $10.2 Billion Kabel Deutschland Tender
Vodafone Group Plc (VOD) began its 7.7 billion-euro ($10.2 billion) takeover of German cable company Kabel Deutschland Holding AG after receiving approval from the country’s financial regulators to publish details of the offer.
Kabel Deutschland shareholders have until Sept. 11 to decide on the 87 euro-per-share bid, which includes a 2.50-euro dividend, Newbury, England-based Vodafone said in a statement today as it released the offer documents. As of today, Vodafone has a 4.2 percent stake in Kabel Deutschland.
The purchase will give Vodafone access to the German company’s 8.5 million connected households as well as potential customers for offers packaging phone, Internet and TV subscriptions. It will also intensify competition with Deutsche Telekom AG (DTE), the country’s former phone monopoly, on whose network Vodafone has so far relied for wireline services.
The deal “will create a leading integrated communications operator in Vodafone’s largest European market,” the company said in the offer document, published on its website today. Kabel Deutschland “provides Vodafone with an attractive platform for TV and fixed broadband in Germany.”
Vodafone won’t make significant divestments or cuts to Kabel Deutschland’s workforce, according to the document.
Kabel Deutschland’s supervisory board is scheduled to meet Aug. 1 to discuss the proposal, a person familiar with the matter said earlier this month. The company has said it would recommend Vodafone’s offer to shareholders.
Vodafone shares rose 0.4 percent to 195.2 pence at 11:26 a.m. in London. Kabel Deutschland rose 0.3 percent to 84.75 euros on the Frankfurt exchange.
Europe is experiencing a wave of consolidation attempts as bidders take advantage of low valuations for telecommunications assets. Vodafone sparred with John Malone’s Liberty Global Inc. (LBTYA) for control of Kabel Deutschland. Liberty bought U.K. Internet and television provider Virgin Media Inc. in June and has been increasing its stake in Dutch cable-TV provider Ziggo NV (ZIGGO), reaching 28.5 percent, according to a July 26 regulatory filing.
A month after Vodafone announced the deal for Kabel Deutschland, Spain’s Telefonica SA (TEF) and Royal KPN NV (KPN) of the Netherlands agreed to combine their German phone businesses. European telecommunications companies have been the target of $43.9 billion in announced deals in the last 12 months, according to data compiled by Bloomberg.
Had Vodafone completed the Kabel Deutschland purchase by April 2012, revenue would have been 3.5 percent higher at 46 billion pounds in the year ended in March 2013, according to the document. Earnings before interest, taxes, depreciation and amortization, would have been 14 billion pounds instead of the 13.3 billion pounds the company reported.
The companies aim to wrap up the transaction following Kabel Deutschland’s Oct. 10 annual shareholder meeting, pending antitrust approval, people familiar with the matter have said.
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