Vodafone lines up white knight in bid for Kabel Deutschland

Vodafone is said to be lining up a 'white knight' to back its rumoured bid for Germany's largest cable operator Kabel Deutschland.

Vodafone is said to be lining up a 'white knight' to back its rumoured bid for Germany's largest cable operator Kabel Deutschland.

The telecommunications company is expected to present an offer as early as this week after Kabel revealed on Wednesday it doubled its net profits to €200m for the nine-months to December 31st.

Vodafone is working to boost its business after reporting a worse than expected 1.8% decline in group revenues of £11.38bn for the last three months of 2012, blaming difficult market conditions in Europe.

A deal with Kabel could help revive the struggling business, according to analyst Ishaq Siddiqi who said he was not surprised to hear the latest reports Vodafone was lining up a white knight in a potentially "hostile bid".

"It could get to a point where we see governments get involved," he told Sharecast.

Vodafone would need clearance from competition regulators who have blocked cable mergers over concerns about higher prices for consumers.

In market chatter Tuesday, Vodafone was understood to have hired Goldman Sachs to advise on options while Kabel retained Morgan Stanley and advisory firm Perella Weinberg to defend its interests in the event of an approach.

Siddiqi said an agreement will depend on how much money Vodafone was willing to put behind its offer for Kabel, which raised its dividend by 67% to €2.50.

"Kabel is in a pretty good position for premium offer," he said.

Shares in Kabel fell 1.57% to €66.93 at 11:04 while Vodafone dropped 1.42% to 160.20p.

RD

Recommended

Share tips of the week – 24 September
Share tips

Share tips of the week – 24 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
24 Sep 2021
Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021

Most Popular

Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021