German Cable Giant Opts for IPO

By Mike Farrell -- Multichannel News, 3/1/2010 11:04:00 AM

Kabel Deutschland, the largest cable operator in Germany, put an end to speculation it would go on the block — and possibly be snapped up by Liberty Global chairman John Malone — saying last week that it would instead commence an initial public offering of stock.

The announcement ends speculation that cable legend Malone would make another attempt to consolidate the German market. Malone had tried a similar tack in 2001, making moves to acquire the cable assets of Deutsche Telekom, but was blocked by regulators who rejected the deal in 2002. Instead, the German government split Deutsche Telekom’s cable holdings into three separate companies — UnityMedia, Kabel BW and Kabel Deutschland.

Speculation heated up that Malone and others would make a play for Kabel Deutschland, which has about 9 million customers, and Kabel BW (with 2.3 million subscribers), after Liberty Global agreed to acquire UnityMedia for $5.2 billion. UnityMedia is the second largest cable operator in Germany, with about 4.5 million customers. Liberty Global closed on that deal in January. The deal speculation heightened after reports that Kabel Deutschland’s largest owner — private-equity giant Providence Equity Partners — was entertaining off ers for the company.

According to reports, Kabel Deutschland said it plans to launch the IPO on the Frankfurt Stock Exchange, but gave no further details regarding timing or the amount of shares to be off ered. Several privateequity groups made off ers for the company, those reports added — estimates were between $6.8 billion to $7.5 billion — but the offers were considered too low.