German Cable Operator PrimaCom up for Sale (Report)
Media reports point to John Malone's Liberty Global and Deutsche Telekom as possible buyers for the insolvent company.
COLOGNE, Germany - Insolvent German cable company PrimaCom is being put on the block, according to media reports Wednesday. Bloomberg quoted anonymous sources "familiar with the process" as saying the Leipzig-based operator, which provides TV, Internet and telephone services to more than 1 million households, would be auctioned off to potential bidders as early as next month.
Media giants, among them John Malone's Liberty Global, Deutsche Telekom and Kabel Deutschland (KDG) are expected to be among the small group of bidders for PrimaCom's assets.
Some analysts put the value of PrimaCom's network at around $500 million, though an auction could drive the asking price up if investors see a strategic advantage in merging PrimaCom with their existing cable networks. Kabel Deutschland might have an advantage here. The German cable giant already has backbone infrastructure in the markets where PrimaCom operates. Buying the bankrupt operator with give KDG direct access to PrimaCom's 1 million connected homes.
Private equity firms could also swoop in to snatch up PrimaCom. Germany's cable market is underdeveloped in comparison to its European neighbors, with few households signed up for costly digital and pay TV services. Most analysts expect the German market to grow faster than any other in Europe. The sale of another cable operator now on the block - the Berlin-based Tele Columbus - is expected to generate up to $1 billion.