Kabel Deutschland debt risk falls on IPO whispers
German cable company Kabel Deutschland's debt risk lessened yesterday, from reports majority shareholder Providence Equity Partners was planning a public listing instead of a sale.
Credit default swaps on the cable television, broadband and phone provider dropped 60 basis points yesterday to 370.5, the lowest in nearly a month, BusinessWeek reported.
The market was responding to rumours that Providence plans to launch an IPO for Kabel Deutschland.
Three anonymous sources told Reuters that Providence will begin preparations for the share sale this week.
Providence had been intending to sell the company to individual investors, and had attracted bids from Advent, Carlyle, Bain Capital and a consortium of CVC and BC Partners.
Bids worth up to €5.5 billion had been submitted, but an investment banker last week warned that financing of the offers might turn out to be impossible.
Providence reportedly believes it can generate higher proceeds from an IPO than a buyout offer, and expects to make up to €1 billion in the share sale while keeping a majority stake.