Escaline bids $613 mil for German cabler
EmptyCOLOGNE, Germany -- Luxembourg cable group Escaline has taken the lead in the battle for Germany's PrimaCom, making a takeover bid for the company during the weekend.
Escaline, through its German subsidiary Orion Cable, is offering to buy out PrimaCom shareholders for €10 ($13.60) a share in a deal that could cost Escaline more than €450 million ($613 million).
Germany's largest cable company, Kabel Deutschland, also has been circling PrimaCom, with early market talk having focused on a potential joint bid with Orion (HR 5/22). KDG signed a deal in June to take an 18.6% stake in PrimaCom.
A KDG spokesman said at the time that the firm was "securing its options for the future" and was looking toward a "possible consolidation of the cable market in Germany." German regulatory authorities, however, ended up blocking the move.
PrimaCom shares shot up Monday on the Orion offer, closing up 7.2% at €10.17 ($13.85) after going as high as €10.29 in intraday trading. That was close to the stock's 52-week high of €11.49 hit in May, according to Bloomberg. Its 52-week low of €3.77 dates back to last July.
PrimaCom is Germany's fifth-largest cable operator with about 1.3 million subscribers. The group reported revenue of €116.4 million for full-year 2006 and booked €50.4 million in profit.
Escaline already controls 25.3% of PrimaCom. The Luxembourg group wants to merge PrimaCom with Orion's German cable assets, a move that would increase Orion's subscriber base to about 4.1 million.
By increasing economies of scale, Escaline hopes to better compete in Germany with KDG, which remains Germany's largest cable company by far with about 10 million subscribers.
Georg Szalai in New York contributed to this report.