Vodafone restarts talks on mega deal for German cable operator

VODAFONE has re-opened talks over a multi-billion pound deal for Kabel Deutschland, the German broadband company.

The telecoms giant was locked in discussions with Kabel Deutschland in February, although a formal offer was not made. However, negotiations were put on hold after the discussions were leaked.

A bid was mooted as being worth up to €10bn (£8.5bn) earlier in the year. This is well above the €6.6bn market value the German firm reached yesterday, even as shares rose more than eight per cent.

Vodafone boss Vittorio Colao has outlined plans to expand beyond its core mobile networks into selling more broadband and pay-TV services in western Europe. Shortly after talks were called off with Kabel Deutschland, Vodafone signed a deal with Deutsche Telekom to provide broadband and pay-TV, although sources at the time said this did not rule out re-entering buyout talks.

Vodafone shareholders appeared dismayed yesterday, with shares falling 5.7 per cent – although the picture was clouded since the news coincided with the company’s dividend-paying period ending.

One outspoken shareholder, Australia’s Bronte Capital, said the bid would be “a nasty diminution of shareholder capital”.