At Least Five Bidders for EQT’s Kabel Baden

Swedish private equity group EQT has received at least five bids for German cable operator Kabel Baden-Wuerttemberg, Reuters reported, adding that the company may still opt for a public offering. Among the bidders are U.S. cable operator Liberty Global, and buyout shops CVC, Cinven, Providence and Hellman & Friedman, Reuters said. A sale of the company is estimated to reach as high as $3.38 billion.

(Reuters) – Swedish private equity group EQT [EQTPRK.UL] has received at least five bids for its cable operator Kabel Baden-Wuerttemberg, but may still decide to float the business, two people close to sales process said.

The bidders include U.S. cable operator Liberty Global as well as private equity investors CVC [CVC.UL], Cinven [CINV.UL], Providence and Hellman & Friedman, the people said.

“EQT will decide within the next couple of weeks whether to opt for a trade sale or an IPO,” one of the people said on Thursday. An initial public offering could take place as soon as April, he added.

“EQT is still pursuing its three options – selling KabelBW to an investor, floating the business or keeping it,” an EQT spokesman said.

KabelBW, Germany’s third-largest cable operator with 2.3 million customers last year, declined to comment.

Sources close to bidders said they are willing to pay 2.5 billion euros ($3.38 billion), but given good capital market sentiment, EQT could earn more by floating some shares and later benefitting from the company’s growth.

EQT hopes to see a price tag of at least 3 billion euros, about 10 times KabelBW’s operating profit, the sources said.

Last year, Providence Equity Partners pursued a dual-track strategy for larger domestic rival Kabel Deutschland (KDG) and ended up opting for a listing.

Deutsche Bank and JP Morgan are handling the process for EQT, which bought KabelBW from U.S. investment group Blackstone in April 2006 for around 1.3 billion euros and which has invested around 500 million euros in network expansion.

Financial investors are likely to be more successful buyers than domestic rivals because the German cable industry is constrained by regulation that effectively bans consolidation among large players.

KDG in 2004 tried to merge with KabelBW and Unitymedia to rival Deutsche Telekom , but anti-trust authorities thwarted the plans.

U.S. cable operator Liberty Global , which acquired Unitymedia in 2009, has said it was interested in more German acquisitions but cited cartel concerns as a stumbling block.

(Reporting by Arno Schuetze, Alexander Huebner, Philipp Halstrick, Nadia Damouni, Peter Maushagen; Editing by Maria Sheahan and Christiaan Hetzner)