Ono Sees Spain Economy Improving While Preparing Cable IPO

Grupo Corporativo ONO SA, the Spanish cable operator preparing an initial public offering, is seeing signs that the nation’s economy will improve in 2014, Chief Executive Officer Rosalia Portela said today.

“Expectations for this year are much better,” Portela said in an interview with Bloomberg TV at the Mobile World Congress in Barcelona today. Work on the IPO “is our main priority” and it will be of “a decent size,” Portela said, declining to give a precise figure. When asked if it would be in the “1 billion range,” she said: “Yes, about that.”

In a separate interview, Orange SA CEO Stephane Richard said the the carrier is open to a transaction in Spain. Paris-based Orange won’t take part in “large cash deals,” and isn’t currently in talks, he said.

Orange has intensified its search for acquisition targets in Spain to avoid being left out of potential consolidation in the country’s telecommunications market, people familiar with the matter said this month. A move by Orange, Spain’s third-largest wireless carrier -- behind Telefonica SA and Vodafone Group Plc -- would underscore rising demand for landline assets that are needed to offer combined broadband, TV and wireless packages.


Vodafone has approached ONO owners about a potential acquisition, people familiar with the matter said this month. ONO is one of Europe’s few remaining major cable assets following Vodafone’s acquisition of Kabel Deutschland Holding AG and Liberty Global Plc’s purchase of Virgin Media Inc. last year.

The ONO IPO may raise about 1 billion euros, and may be followed by its own acquisitions of smaller local cable operators, people familiar with the matter said this month.

It’s too early to give figures for how much growth ONO will see this year, Portela said. The company added 9,000 Internet customers and 183,000 mobile subscriptions in the fourth quarter. It also reduced customer turnover in the period after putting more emphasis on selling bundles of TV, Internet and phone service.

“Telco companies need a lot of capital and need critical mass,” Portela said. “That’s why we’re doing this IPO.” Consolidation in European telecommunications will happen “but will happen slowly,” she said.

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