British telecom giant Vodafone Group plc (VOD, VOD.L) has raised its preliminary offer for German cable operator Kabel Deutschland Holding AG (KBDHF) to about 7.5 billion euros, or $10 billion, Bloomberg reported Tuesday, citing people familiar with the bid.
According to the Bloomberg report, Vodafone is now willing to pay 85 euros per share, up from its prior offer of 80 euros to 82 euros per share that was initially rejected by Kabel Deutschland. Vodafone is now reportedly in talks with Kabel Deutschland and studying its books.
Kabel Deutschland is Germany's largest cable operator. It offers customers digital, high definition and analog TV, Pay TV and DVR offerings, Video on Demand, broadband Internet and fixed-line Phone services via cable as well as mobile services in cooperation with an industry partner. The company operates cable networks in 13 German federal states and supplies its services to about 8.5 million connected households.
On Monday, Kabel Deutschland confirmed that it received a preliminary proposal from Liberty Global plc (LBTYA, LBTYB, LBTYK), but did not disclose the price. According to media reports, Liberty Global has also put forward a bid of 85 euros per share for Kabel Deutschland, valuing the deal at 7.5 billion.
Billionaire John Malone's Liberty Global, which earlier this month completed the acquisition of Virgin Media Inc. in a stock and cash deal valued at about $24 billion, will now probably join Vodafone in a bidding race for Kabel Deutschland.
According to the Bloomberg report, Kabel Deutschland may favour Vodafone's all-cash bid that has a better chance of being approved by Germany's Federal Cartel Office, compared to Liberty Global's offer in shares. Liberty Global owns Unity Media, Germany's second-biggest cable operator.
VOD closed Tuesday's trading on Nasdaq at $28.71, up $0.15 or 0.53 percent on a volume of 9.34 million shares.
On Frankfurt's Xetra, shares of Kabel Deutschland closed Tuesday's trading at 85.51 euros, up 3.04 euros or 3.69 percent on a volume of 1.48 million shares.
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