Bidding Begins for German Cable Operator PrimaCom
Deutsche Telekom is reportedly offering up to $347 million for Germany's fifth largest cable group.
The bidding for PrimaCom has begun in ernest with investors, including telco giant Deutsche Telekom, cable group DTK and U.K. investment house Star Capital Partners, submitting offers for Germany's fifth largest cable operator.
The Financial Times Deutschland, quoting unnamed sources familiar with the auction, said Deutsche Telekom put in one of the highest bids, offering $310 million - $347 million (€250 million - €280 milion) for the company, which severs around 1 million customers in and around Berlin.
The consortium of hedge funds and investment companies that control PrimaCom would only confirm that they are in discussions with several parties.
If Telekom succeeds in its bid, it would mark the group's re-entry into the German cable market. The former state monopolist was forced to sell off its cable assets following its privatization in 1995. Telekom made a move for cable group Tele Columbus earlier this year but was outbid by Kabel Deutschland, Germany's largest cable operator, which paid just under $750 million (€603 million).
John Malone's Liberty Global has also been named as a possible bidder for PrimaCom. Liberty Global has been a prime driver in the German cable market, late last year closing a $4 billion deal to buy regional operator Kabel BW and merge it with their German cable group Unitymedia.
The German cable market has been heating up as consumers increasingly switch to pricey triple play offerings - buying TV, telephone and high-speed Internet services from the same cable provider. Subscription levels, which have slipped in the U.S. as viewers cut their cables in favor of online offerings, have held steady in Germany and revenues have gone up.