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Share Price: 74.78
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Change: 0.92 (1.25%)
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Open: 73.70
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UPDATE 1-Vodafone gets enough shares for $10 bln Kabel Deutschland takeover

Thu, 12th Sep 2013 19:55

* Vodafone says reached 75 pct threshold for takeover

* Says to unveil details of acceptance ratio on Monday

* Deal still needs EU regulatory clearance

* Deal would give Vodafone leg up in fragmented market

FRANKFURT, Sept 12 (Reuters) - Vodafone has securedenough shares in Kabel Deutschland for its 7.7billion euro ($10 billion) offer for Germany's largest cablecompany to succeed, Vodafone said on Thursday.

"The 75 percent minimum acceptance condition has been met,"Vodafone said in a statement on Thursday, adding that it wouldpublish details on Monday of the number of shares tendered.

Vodafone's 87.00 euro per share offer for Kabel Deutschland,which includes a 2.50 euro dividend payment, ended on Sept. 11.

The British company, which this month agreed the sale of itsstake in U.S. operator Verizon Wireless for $130 billion, wantsto buy Kabel Deutschland to offer more television and fixed-lineservices in Germany, its largest European mobile market.

Vodafone said Kabel Deutschland shareholders who had notaccepted the offer yet may be given an additional chance to doso between Sept. 17 and Sept. 30.

It also said the deal still needed regulatory clearance fromthe European Commission, with the completion of a first reviewexpected by Sept. 20.

STEALING A MARCH

So-called "quad-play" services offering TV, broadband,mobile and fixed-line telephony have caught on rapidly inmarkets such as France and Spain, but the largely fragmentedGerman cable market is still some way behind.

This means a deal for the cable company could enableVodafone to steal a march on rivals such as Liberty's UnityMedia and Deutsche Telekom.

With consumers wanting to watch TV and video on an array ofdevices, cable assets have become more attractive as they canprovide internet services at speeds often five times faster thancompeting services from traditional telecom companies.

Vodafone has said it expected synergies from the deal toexceed 300 million euros a year before integration costs, by thefourth full year following completion.

It also sees potential for revenue synergies of 1.5 billioneuros from cross-selling products and improved customer loyalty.

The deal values Kabel Deutschland at 12 times enterprisevalue against 2013 core earnings, a 35 percent premium to thesector. However, this falls to 8.5 times when taking intoconsideration the synergies Vodafone expects to extract,analysts have said.

The high price reflects the desire of the world'ssecond-largest mobile operator to adapt in its core market ofEurope, where increasing regulation and recession have hitrevenue and forced it to write down the value of its assets.

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