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* To raise 2012/13 dividend to 2.50 euro/shr from 1.50
* Traders see as move to ward off possible Vodafone bid
* Q3 adj EBITDA 220.3 mln euros vs 219 mln expected
* Keeps 2012/13 outlook
* Shares rise 2.5 pct, outperform sector (Rewrites first paragraph, adds fund manager comment, detail,background)
By Harro Ten Wolde and Arno Schuetze
FRANKFURT, Feb 20 (Reuters) - Kabel Deutschland is to hike its dividend 67 percent in a move which some tradersand investors saw as a first defensive jab to ward off apossible 10 billion euros ($13.4 billion) bid from Vodafone.
Germany's biggest cable operator said it would raise itspayout to 2.50 euros a share for the year through March from1.50 euros a year before, after the failure of its 618 millioneuros ($825 million) attempt to buy local rival Tele Columbus left it with surplus cash.
"This seems the first poison pill to avert a Vodafonetakeover," a Frankfurt-based trader said on Wednesday. "Thetakeover battle has started."
Kabel Deutschland's success in the German broadband markethas caught the attention of Vodafone, the biggest mobileoperator in Germany, and the UK-based company has hired GoldmanSachs to advise on its options, a person with directknowledge of the matter told Reuters on Tuesday.
Vodafone needs to expand into more profitable areas such ascable as it faces a squeeze between low-cost mobile challengersand telecom and cable rivals who are increasingly pushingdiscounted, all-included bundles of mobile and other services.
A spokesman for Vodafone declined comment.
The German group said it would pay a total dividend ofaround 220 million euros after its shareholders meeting inOctober. It also said it would invest an extra 300 million eurosin the next two years in its network.
Some said its plan to spend the cash from the aborted TeleColumbus deal as quickly as possible could be a means to driveup its share price and make a bid less attractive for Vodafone.
"This could be the first step in a defence strategy," saidfund manager Andreas Mark at Union Investment, which has 0.11percent of Kabel Deutschland shares.
RAISE THE BAR
Mark noted that after the dividend hike, Kabel Deutschlandshares would offer a yield of 3.7 percent.
"They have given a clear signal," he said.
The shares currently offer a yield of 2.2 percent, accordingto Reuters StarMine data.
Kabel Deutschland shares were 2.5 percent higher at 69.05euros at 1345 GMT, at the top of a 0.1 percent weaker sectorindex. The company has an enterprise value includingdebt of around 8 billion euros and some analysts estimateVodafone would have to stump up around 10 billion to secuurecontrol.
"I think they (Kabel Deutschland) have to raise capex(capital spending) to keep growth going," said RobinBienenstock, an analyst at brokerage Sanford C Bernstein. "Butit does also raise the bar for Vodafone and Liberty Global," sheadded, referring to its main domestic rival.
Liberty Global's Unity Media brand and KabelDeutschland hold about 13 percent of the German broadband marketand have been winning customers with cheaper prices and higherspeeds from Deutsche Telekom, which still has 40percent of the market.
Kabel Deutschland Chief Financial Officer Andreas Siemendeclined to comment on whether there has been any contactbetween the companies regarding a deal.
Asked whether the dividend hike was a defensive move againsta potential offer, a Kabel Deutschland spokeswoman said onlythat the increase was facilitated by the company's improvingresults and the failure of the Tele Columbus bid.
Kabel Deutschland also on Wednesday posted a 10 percent riseto 220 million euros in earnings before interest, taxes,depreciation and amortization (EBITDA), excluding special items,for the three months ended Dec. 31.
That was at the high end of analyst expectations in aReuters poll, which ranged from 217 million to 222 million.
Kabel Deutschland said it still aimws to increase sales inthe current fiscal year by between 7.5 percent and 8.5 percentand expects yearly adjusted EBITDA of between 855 million and870 million euros. ($1 = 0.7487 euros) (Editing by Hans-Juergen Peters and David Holmes)
