German Cable Giant Opts For IPO2/24/2010 1:17 PM Eastern
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 -- announcing Tuesday 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 cable 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 the 2.3 million-subscriber Kabel BW, after Liberty Global agreed to acquire UnityMedia for $5.2 billion.
Unity Media 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 offers 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 offered. According to several reports in the German press, Kabel Deutschland received several offers from private equity groups for the company - estimates were between 5 billion and 5.5 billion euros ($6.8 billion to $7.5 billion) - but considered them too low.