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Analyst: Vodafone is considering a bid for Spain's Yoigo

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Vodafone is considering a takeover of Spain's Yoigo, according to an analyst report from Zacks Equity Research. The deal, which could see Vodafone bidding between €750 million to €1.2 billion, could face counter bids from Telefónica and France Telecom Orange.

Yoigo, which is owned by Sweden's TeliaSonera, has around 3.5 million customers and was first put on the market last year. TeliaSonera had hoped to get €1 billion for the Spanish operator and while Vodafone indicated an interest in purchasing it, the deal collapsed when offers fell short of the goal.

The Spanish operator reported 2012 revenues of €963 million, a 17 per cent increase over 2011, while EBITDA rose 55 per cent to €72 million. Yoigo, according to Telecom Paper, is targeting to have 4.2 million customers by year-end, with EBITDA increasing by nearly 47 per cent and revenues up by 10.8 per cent.

Vodafone and TeliaSonera have not confirmed they are in discussions.

Separately, the heavily rumoured deal that would see Vodafone paying around €10 billion to acquire the German cableco Kabel Deutschland is still under consideration, a banker familiar with the plans told Reuters last week.

The UK-based operator still sees merit in a takeover of Germany's biggest cable operator, and is mulling how best to make an approach. The banker told Reuters that, if Vodafone were immediately to make contact with Kabel Deutschland, it would have to disclose the plan to the public. "It is just taking a bit of time," the person said.

This conflicts with an earlier Bloomberg report claiming that Vodafone had put its plans on hold after leaks of a potential offer complicated internal discussions, according to three people familiar with the matter.

"This leaves Vodafone in an awkward situation," Sanford C. Bernstein analyst Robin Bienenstock wrote in a note to clients. It opens the possibility that Kabel Deutschland will "enter a partnership relationship or more with another wireless player. This could leave Vodafone counter-bidding or simply marginalised."

For more:
- see this Zacks Equity Research article
- see this Telecom Paper article
- see this Reuters article
- see this Bloomberg article

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