John Malone rumored to be eying Kabel BW

Southern German cable group could be on shopping list

COLOGNE, Germany -- It seems John Malone just can't get enough of German cable TV.

After shelling out some $5 billion in November for Cologne-based Unitymedia, Europe's third largest broadband cable operator, Malone's Liberty Global has set its sights on southern cable group Kabel BW, according to German media reports.

Although Liberty Global CEO Mike Fries just last week said the group was not planning further acquisitions, German financial Handelsblatt cites "industry sources" claming Kabel BW is on Malone's shopping list.

The cable group serves 2.3 million customers and is currently owned by investment group EQT. EQT have been looking to sell for sometime now.

Unitymedia had planned to buy Kabel BW last year, before the Liberty deal emerged, but initial talks went nowhere. The price tag for Kabel BW would be around $2 billion, making it a feasible deal for Liberty.

Kabel BW would fit nicely with Unitymedia, which serves some 4.6 million customers. Combined, the two would form a pan-European network of around seven million households stretching from the Netherlands through Germany to Austria and Switzerland.

Some German analysts and commentators suggest Malone may also be eying the country's number one cable group Kabel Deutschland (KDG).

Equity group Providence has signaled it is ready to sell its controlling stake in KDG and has brought on former Time Warner boss Richard Parsons, an old Malone buddy, as an advisor.

But we've been here before. Back in 2001, Malone offered €5.5 billion to buy up Deutsche Telekom's national cable network. The German monopoly commission blocked the deal and carved up the network – eventually producing KDG, Unitymedia and Kabel BW.

Anti-trust watchdogs could thwart Malone again. His Unitymedia deal is still waiting regulatory approval. Malone needs that before he can start thinking seriously of expanding his German cable empire.