Monday 12 November 2018

TV3's Malone set to exit Germany in €18bn Vodafone deal

John Malone chairman of Liberty Global
John Malone chairman of Liberty Global
Donal O'Donovan

Donal O'Donovan

Vodafone is close to buying large parts of TV3 owner John Malone's European cable group Liberty Global in a deal worth around €18bn, in a move that will end years of on and off talks between the two companies.

The deal will see John Malone exit the German and eastern European markets, according to a report in the 'Financial Times'.

Talks between the two companies about a deal for Liberty's German and Eastern European cable operations were reported by Reuters last week.

Liberty is due to report its first-quarter results today, after the US market closes and Vodafone has its annual results the following week on May 15.

That provides the opportunity to unveil a deal. The two sides could still hit a hurdle, however.

Vodafone said in February it was in talks about buying Liberty's assets in the continental European countries where they overlap: Germany, Czech Republic, Hungary and Romania.

The two had previously discussed combining operations in 2015, but they could not reach agreement on valuations.

But the logic of bundling Vodafone's mobile networks with Liberty's broadband and cable TV to take on former incumbents such as Deutsche Telekom never went away.

The thesis has already been tested in the Netherlands, where the two formed a joint venture, VodafoneZiggo, in 2016.

When the talks were announced three months ago, analysts at Royal Bank of Canada said that based on a typical deal multiple of 11 times enterprise value divided by core earnings, Vodafone could pay about €20.7bn for Liberty's Unity Media in Germany and the other assets.

Deutsche Telekom has already voiced its concern over a deal and a lobby group representing Germany's glass fibre industry say it should be blocked because it would create a cable TV monopoly in the country.

The talks coincide with a mergers and acquisitions boom in Britain as company bosses take advantage of the availability of cheap debt financing and confidence in the global economy to strike deals.

US cable operator Comcast is asking investment banks to increase a bridge financing facility by as much as $60bn so it can make an all-cash offer for media assets that Twenty-First Century Fox has previously agreed to sell to Walt Disney.(Additional reporting Reuters/ Bloomberg)

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business