Vodafone to begin takeover talks for Kabel Deutschland this week

Vodafone may approach Germany's largest cable provider Kabel Deutschland about a takeover bid as early as this week, according to published reports.

Vodafone, the world's second-largest wireless carrier, is waiting for its German rival to release its earnings results on Wednesday before beginning negotiations, a source told Bloomberg.

The acquisition of Kabel Deutschland would boost Vodafone's position against other cable competitors.

It would also help Vodafone avoid paying Deutsche Telekom rental fees on copper lines for its TV, internet and fixed-line offers to mobile customers. Vodafone Germany has 3.2m fixed-line internet subscriptions, some of which could be transferred to Kabel Deutschland's network.

Shares in Kabel Deutschland rose 4.24% to €71.34 as of 11:46 following the news, while Vodafone's dropped 0.12% to 167.60p.

Kabel Deutschland, which provides TV, internet and phone services to more than 8.0m households in Germany, had an enterprise value including debt of €7.8bn at the end of September, according to data compiled by Bloomberg.

Earlier this month Vodafone posted a worse than expected drop in group earnings for the last three months of 2012. Revenues fell 1.8% to £11.38bn year-on-year for the quarter, experiencing the biggest decline in the take up of services in Europe.

RD