VODAFONE takeover target Kabel Deutschland hiked its dividend by two thirds yesterday in a move that may protect the company from a bid.
The German cable company, which Vodafone is circling as it attempts to improve its presence in the country, also saw profits double to €200m (£175m), boosted by strong demand for broadband and pay-TV.
However, the company’s management refused to comment on whether it had been approached by Vodafone over a deal that would be likely to value Kabel Deutschland at more than €6bn.
Shares in the company rose by about 1.5 per cent as it raised its dividend by 67 per cent, a move that was widely seen as a defensive move to prevent a hostile takeover. The company’s value had risen by nine per cent last week as news of Vodafone’s interests emerged.
The British telecoms giant has appointed longtime advisers Goldman Sachs and UBS to work on the deal. Vodafone is interested in Kabel Deutschland as it tries to protect its German mobile base, with increasing numbers of people taking broadband, mobile and TV contracts as a bundle.
An acquisition would be the latest in a series of large telecommunications deals, which has included US firm Liberty Global’s $23.3bn (£15bn) takeover of British company Virgin Media.
The companies did not comment on takeover speculation.