German Cable Giant Opts for IPO

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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
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. Several private-equity
groups made offers for the company, those reports added -- estimates were
between $6.8 billion to $7.5 billion -­ but the offers were considered too low.

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