Vodafone has reportedly reached a preliminary agreement to buy Spanish broadband services provider Ono, although Ono's management board is also said to be moving ahead with plans to list the company until Vodafone makes a firm offer.
Citing unnamed sources, Reuters said on Friday that Vodafone had reached a preliminary deal after raising its initial bid, which was previously rejected as too low by Ono. The Financial Times said the revised bid values the Spanish group at more than €7 billion ($9.7 billion).
Vodafone CEO Vittorio Colao is reported to have accelerated due diligence proceedings over the weekend. Meanwhile, Ono is understood to be pursuing its planned initial public offering that also values the company at around €7 billion, until it has a firm offer from Vodafone to consider.
The Wall Street Journal said Ono shareholders are due to meet on Thursday, when they are expected to approve the IPO unless an attractive offer has been made by Vodafone or another buyer. Liberty Global is also believed to be a potential suitor for the Spanish group.
Neither Vodafone nor Ono responded to requests for comments on the current situation. The Journal added that a formal offer by Vodafone could be ready by Tuesday this week.
Ono is one of the few remaining independent cable assets in Europe after Vodafone bought Kabel Deutschland last year and Liberty Global acquired Virgin Media. Liberty Global recently secured Ziggo in a deal that valued the Dutch cable operator at €10 billion including debt.
In February, Colao said Vodafone could have a war chest of between $30 billion (€21.6 billion) and $40 billion for future mergers and acquisitions, and added that no deal should be too big if it made strategic sense.
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