Vodafone’s £16bn bid for US cable giant
Vodafone is set to make a £16billion swoop on a US rival in a bid to lead a massive expansion across Europe.
The telecoms company will snap up large swathes of Liberty Global’s cable network across the continent.
This latest takeover comes amid a flurry of deal making across the globe, with many being struck in the UK, including a £45billion swoop by Japan’s Takeda on London-listed drug maker Shire.
Vodafone is set to make a £16bn swoop on a US rival Liberty Global in a bid to lead a massive expansion across Europe
Yesterday, American cable giant Comcast, which owns Universal Pictures, was also rumoured to be preparing a £45billion siege of Rupert Murdoch’s 21st Century Fox , while Clydesdale and Yorkshire Banking Group offered £1.6billion for Virgin Money.
In total the deals could be worth around £110billion.
Vodafone’s expected bid for cable assets in Germany, the Czech Republic, Hungary and Romania would strengthen its hand as it vies for dominance with telecoms powerhouse Deutsche Telekom. Both companies are trying to consolidate telecoms networks that span the continent.
Vodafone has already struck cable deals in Britain, Germany and Spain, while Deutsche Telekom – which is 32 per cent owned by the German state – is the largest shareholder of BT and controls assets in several European countries, stretching from the Netherlands to Greece.
Liberty Global, which is controlled by John Malone, the so-called ‘cable cowboy’, is reportedly keen to quit the market because it believes it has become fragmented.
The firms revealed they were in talks in February, with the deal reportedly codenamed Project Scorpio by insiders.
But Deutsche Telekom’s boss, Tim Hoettges, has vowed to oppose the plans and is expected to lobby German politicians to block them over fears it would give Vodafone too much power.
Earlier this year, the German, who is on football team Bayern Munich’s supervisory board, entered into a war of words with Vodafone boss Vittorio Colao over the Liberty sale.
The 55-year-old said: ‘I find it from a competitive perspective unacceptable. The dominance in the TV market, combined with a telecommunication provider, is something I personally find very tricky for democracy.’
The comments spurred Colao to confront his long-time rival at a dinner in Barcelona. ‘I told him he has made a big mistake’, the Italian, 56, said afterwards.
At a press conference, he added: ‘Here you have Deutsche Telekom, the largest European telecoms company by market capitalisation, with the highest number of accesses into homes in the best and most important European market. Using the expression “shutting down competition” is something that, if I were him, I would not do.’
Analysts have suggested Vodafone’s chance of success depends on whether competition officials in Germany or the EU rule on the deal, with regulators in Brussels thought to be more likely to approve it.
The Liberty-Vodafone deal will not include Virgin Media, which is owned by Liberty.
£10m payday for drugs chief as Japanese buy Shire
Windfall: Shire boss Flemming Ornskov stands to make more than £10m
Shire’s boss stands to make more than £10million after the drug maker finally agreed to be taken over by a Japanese rival for £45billion.
Flemming Ornskov, 60, will receive the cash for 212,538 shares he holds in the company, which yesterday backed a £49.01-per-share offer from Takeda.
The Dane has already taken home about £30million in pay over the past five years.
Led by chairman Susan Kilsby, London-listed Shire had spurned several earlier proposals from Takeda, leading the suitor to increase its offer four times.
Over the course of talks, the final price rose by more than 11pc from the original £44 per share that had been put forward.
Takeda president and chief executive Christophe Weber said: ‘This has never been a hostile approach. It has been a dialogue.
And you reach an agreement by improving your offer.’ He said the deal would allow the enlarged firm to become a leader in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies, which are life-saving treatments developed from human blood plasma.
He insisted it was too early to discuss specifics, such as how many jobs were likely to be cut.
However, about £1billion of cost savings are expected to focus on areas where the two companies have overlapping operations, and it was reported up to 7 per cent of their combined 52,000 workforce could go.
The deal represented a major success for Kilsby, who formerly headed Credit Suisse’s M&A operations in Europe.
She said the tie-up ‘is in the best interests of our shareholders, our patients and the communities we serve’.
Shares yesterday rose 4.6 per cent, or 178.5p, to 4034.5p.
Virgin share probe after rival’s £1.6bn bid
City watchdogs are investigating a surprise rise in Virgin Money’s share price before it announced a £1.6billion takeover offer from the owner of Yorkshire Bank.
Shares rose 15 per cent last week before CYBG’s bid was unveiled yesterday morning, which caused a further rise of 9.9 per cent, or 30.9p, to 343.3p.
Last night the Financial Conduct Authority launched a probe as large moves in share prices, particularly ahead of a takeover deal, can be a sign of insider dealing.
A tie-up between the two firms would give Virgin and CYBG more muscle to take on the big names.
It is offering to buy Virgin Money in a £1.6billion all-share takeover which would give the brand’s founder Sir Richard Branson a £560million stake in the merged group.
CYBG is offering 15 per cent more than Virgin shares were worth before its approach was made public. But analysts said this is still not a reflection of its true value.
An FCA spokesman said they ‘conduct surveillance on a daily basis and routinely look at unusual or sudden changes in price’.
Now Universal swoops on 21st Century Fox
The owner of Universal Pictures is preparing to gatecrash Disney’s takeover of 21st Century Fox with a £45billion counter-bid – having already hijacked Rupert Murdoch’s move for Sky.
War chest: Comcast boss Brian Roberts
Brian Roberts, chief executive of US giant Comcast, is believed to have raised the cash required from investment banks.
He is waiting, however, for a court ruling on AT&T’s takeover of Time Warner.
Comcast was in the running to buy Fox’s entertainment assets but pulled out after claiming the company had not properly engaged with its advances.
Days later, Fox chairman Rupert Murdoch and Disney boss Bob Iger announced their £39billion deal and said they intended to complete it by early 2019.
The deal included Fox’s holding in broadcaster Sky, which it was expected to take from 39 per cent to 100 per cent through a takeover that was already on the table in the UK.
But Comcast shocked investors in February by revealing it planned to table a rival £22billion for Sky.
Comcast declined to comment.