American private equity firms Cerberus Capital Management and Providence Equity Partners are rumored to be planning a $15 billion offer for Vodafone's struggling Japanese unit, throwing a wrench into Vodafone's talks with Japanese ISP Softbank to buy the business. While the business is a drain on Vodafone, it's an important foothold for a presence in the Japanese market. Softbank has already been approved by the Japanese government to roll out a network, but purchasing Vodafone's asset would be a cheaper alternative for getting into the market. But Softbank investors have started souring on the idea of the company's purchase.
Earlier this week private equity firms Kohlberg Kravis Roberts & Co (KKR), Apax and CVC Partners were also linked in reports suggesting that they were considering a $121 billion bid for Vodafone's Japanese mobile business. Yet the trouble all interested parties have is raising the funding to purchase the unit. It's widely known that no one party could put up more than $6 billion in equity, and funding the rest would drain the debt market.