(Reuters) – Spain’s largest cable operator Ono said it was pressing ahead with its plan for a stock market sale, putting pressure on Britain’s Vodafone to raise its takeover proposal.
Ono, which sells fixed and mobile phone, TV and internet services, has been preparing a 7 billion euro ($9.6 billion) stock market listing to capitalise on high investor interest in European cable firms.
Vodafone had approached its private equity owners with a takeover offer, sources familiar with the matter told Reuters earlier this week, in an attempt to pre-empt the initial public offering (IPO) and create the biggest rival to date for Spanish market leader and former monopoly Telefonica.
Ono said on Wednesday its board did not discuss any takeover proposal at a meeting on Tuesday.
A potential competing bidder, U.S.-based Liberty Global controlled by billionaire John Malone, has also expressed an interest in Ono, a person familiar with the situation has said.
“We believe that the acceleration of the IPO may tip the scales in terms of forcing the hand of possible bidders in making up their mind before the IPO, or risk having to pay higher multiples in the future for a takeover,” said JB Capital Markets in a note to clients.
Analysts said the situation was reminiscent of the stock market sales of European cable operator peers Kabel Deutschland and Ziggo that were subsequently taken over by Vodafone and Liberty, respectively, at higher prices.
One source, who had been briefed on the Ono board’s discussions, said the directors had agreed to first carry out a capital increase of 800 million euros and later sell existing shares for a total amount of at least 200 millions euros.
Ono believes it has an enterprise value of around 7 billion euros ($9.5 billion), including debt worth 3.4 billion euros. Based on this price, about 25 percent of the company would float on the stock exchange after the listing, the source said.