Kabel Deutschland will not fight a potential €10 billion takeover bid from Vodafone, two unnamed sources close to Germany's biggest cable company told Reuters.
"Kabel Deutschland is not in a defence mode," one of the sources said on Thursday, while the other person added: "Kabel Deutschland will assess any offer with an open mind." Vodafone and Kabel Deutschland declined to comment, according to Reuters
Both Kabel Deutschland and Vodafone have consistently offered no comment with regard to mounting speculation that a bid by Vodafone is imminent, despite rumours that heavyweight financial advisors have been hired by both sides.
Any indications that Kabel Deutschland was ready to enter into negotiations with Vodafone were dashed after the company raised its dividend by nearly 70 per cent--a move interpreted by German analysts as the cable company building a strategy to deter a hostile takeover.
"This could be the first step in a defence strategy," Union Investment fund manager Andreas Mark told Reuters. The fund manager said that the dividend hike would see Kabel Deutschland shares yielding 3.7 per cent, as against the current yield of 2.2 per cent. "They have given a clear signal," he said.
A Kabel Deutschland spokeswoman denied that the dividend increase was a defensive move against a potential offer, adding that this higher yield was made possible by the company's improving results and the failure of its bid for Tele Columbus, according to Reuters.
Kabel Deutschland plans to spend an additional €300 million over two years on its network after a plan to buy Tele Columbus Group was blocked Germany's antitrust regulator.
For more:
- see this Reuters article
- see this separate Reuters article
- see this Bloomberg article
- see this ShareCast article
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