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

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Investors are shunning UK stocks – but they might regret that in a year’s time
UK stockmarkets

Investors are shunning UK stocks – but they might regret that in a year’s time

There are a number of reasons why investors aren't buying UK stocks, says John Stepek. But they may want to rethink that strategy.
29 Sep 2020
Are we really in a stockmarket bubble?
US stockmarkets

Are we really in a stockmarket bubble?

The rise of “cash shell” companies, sky-high valuations – everything seems to point to a stockmarket bubble. But all may not quite be as it appears, s…
28 Sep 2020
Two commodities that could lie at the heart of the next resources bubble
Energy

Two commodities that could lie at the heart of the next resources bubble

Commodities tend to move in cycles. And if you can identify early on which ones are about to surge in demand, you can profit handsomely. Dominic Frisb…
30 Sep 2020