Vodafone reportedly approaches ONO on possible acquisition

Acceptable bid for cable company would have to be in the region of 7-8 billion euros

British cellphone giant Vodafone has approached ONO’s owners about a potential acquisition as the Spanish cable company meets this week to discuss an initial public offering or a sale, people familiar with the matter said.

A bid by Vodafone will probably have to be in the range of 7-8 billion euros to win the board’s backing, based on feedback from recent investor meetings on a share sale, one of the people said.

ONO is one of Europe’s few remaining major cable assets available after Vodafone acquired Kabel Deutschland Holding and Liberty Global bought Virgin Media last year. As cable providers accelerate offers of combined broadband, phone and television services, Numericable SAS of France and its shareholder Altice have raised more than $2.6 billion in separate initial stock sales in recent months.

Ben Padovan, a spokesman for Vodafone, declined to comment, as did Estefanía Somoza, a spokeswoman for ONO. Bloomberg News reported on January 26 that Vodafone is seeking to acquire ONO and that a deal may be announced in a few weeks.

ONO’s directors, scheduled to meet on Tuesday, plan to hire banks for the IPO by early March, depending on which can come up with a superior proposal to reorganize its debt to lower financing costs, two of the people said. A share sale could take place by April, they said.

The company’s top shareholders include Thomas H. Lee Partners, Providence Equity Partners, CCMP Capital Advisors and Quadrangle Capital Partners. Spokesmen for Providence and CCMP declined to comment. Representatives for Thomas H. Lee and Quadrangle could not be immediately reached for comment by telephone outside of regular business hours.

Vodafone has presented a bid for ONO, Spanish financial daily Expansión earlier reported, without saying where it got the information.

Vodafone, the world’s second-largest wireless carrier, behind China Mobile, last week reported a 14 percent slide in quarterly revenue in Spain, one of its weakest markets.

ONO added 9,000 internet customers and 183,000 mobile subscriptions in the fourth quarter after putting more emphasis on selling bundles of TV, internet and phone services. It lost 17,000 TV customers during the period.

The company’s nine-month earnings before interest, taxes, depreciation and amortization fell 6.3 percent to 529 million euros, as competition with Telefónica and Jazztel intensified. Its net debt at the time was 3.3 billion euros. The company hasn’t released detailed financial results for the fourth quarter.

Recomendaciones EL PAÍS
Recomendaciones EL PAÍS