Vodafone and the U.S. cable firm Liberty Global are gearing up for a possible £6 billion bidding war for Spain’s biggest cable operator Ono.
According to media reports, both Vodafone and Liberty Global have identified Ono as a key component in their respective quests to grow their market presence in Europe.
Liberty Global is the international cable vehicle of U.S. media mogul John Malone (pictured).
Mobile understands that both telco’s have made separate approaches to Ono shareholders to discuss a possible purchase that may be valued around £6 billion.
The Financial Times reported that neither group has made any approach to the board of Ono and that the talks are “preliminary”, while Ono’s management has publically stated its commitment to a stock market flotation.
Both Vodafone and Liberty Global and well placed for a major acquisition.
Vodafone shareholders have recently approved the company's $130 billion sale of its 45% stake in Verizon Wireless to joint-venture partner Verizon Communications . The deal leaves the slimmed-down Vodafone cash-rich and able to shore up its competitive position in Europe.
Meanwhile, Colorado-based Liberty Global this week agreed to acquire full control of Dutch cable company Ziggo for about £6 billion. Liberty Global has been an active deal maker in Europe over the past two years, and analysts say Mr. Malone's ambitions on the continent are far from satisfied.
Ono provides fixed telephony, broadband, pay-TV, and mobile services throughout Spain and is the only fibre operator with nationwide coverage for both households and businesses. The company’s own high-capacity fibre optic digital networks provide direct access to more than seven million homes across most of Spain, including the nine largest cities. In 2012, Ono recorded a net profit of €52 million on revenues of €1.57 billion.
Investment funds Providence Equity Partners, CCMP Capital, Thomas H. Lee Partners, and Quadrangle Capital together own 54 percent of ONO, with nine other institutional investors holding the balance, according to the Spanish company's website.