Report: Vodafone target Ono prepares €7B IPO

Speculation is mounting that Spanish operator Ono is preparing a flotation that could value it at €7 billion, while rumours persist that Vodafone is still interested in buying the TV, broadband and telecoms operator as part of its European convergence strategy.

According to the Financial Times, Ono is in the process of selecting banks to advise it on the flotation process, and intends to carry out its IPO later this year. Reports in December had already suggested that Ono was considering an IPO in 2014, but the FT said the IPO process could be derailed by interest in the company from other telecoms operators.

"A listing would put a price on the asset and make it a palatable target for the likes of Vodafone or Orange, whose margins have been seriously pressured by the ongoing war on prices," unidentified sources told Reuters in December.

In order to gain the necessary fixed assets to allow it to offer bundles of fixed and mobile services, Vodafone has been buying up operators such as Kabel Deutschland in Germany and forming wholesale agreements or other arrangements elsewhere.

In Spain, however, Vodafone and Orange already said in March that they would invest up to €1 billion to jointly build a fibre network that would bring high-speed Internet service to 6 million households across 50 major cities by September 2017.

Telefónica has also crafted an agreement with Vodafone Spain and Orange Spain to share vertical fibre network infrastructure in buildings they serve throughout Spain.

Yet despite this network collaboration, speculation that Vodafone could still be interested in buying Ono refuses to die.

"Vodafone's urgent need to compete more with Telefónica's proactive quadruple-play offer means cable operator Ono and Jazztel could be potential targets," Deutsche Bank analysts wrote in a note in December, Reuters reported at the time.

For more:
- see this Financial Times article (sub. req.)
- see this Reuters article

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