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Vodafone is turning out to be a persistent suitor.
The British telecommunications giant has submitted a tentative offer for the Spanish cable company Ono that values it at around Euro7 billion, or $10 billion, according to people with direct knowledge of the matter, who spoke on the condition of anonymity.
The prospective bid will entail fast-tracked due diligence by Vodafone over the weekend. Ono's board meets on Thursday to consider whether to approve an initial public offering, and a formal offer would have to be submitted before the meeting, the people said.
Rumours have circulated in recent months that Vodafone would make an offer for Ono, which would allow Vodafone to compete with Telefónica of Spain to offer high-speed broadband to its Spanish customers.
Despite the interest, Ono's board has repeatedly stressed that it continues to focus on a potential IPO.
"The major reason for the IPO is to have financial flexibility," Ono's chief executive, Rosalía Portela, said in an interview on Wednesday. "The bigger you are, the easier it is to get capital."
But bankers and analysts have said that the company's shareholders - which include private equity firms like Providence Equity Partners, CCMP Capital Advisors and Thomas H Lee Partners - may prefer a sale to a larger telecoms rival over a potentially risky listing on the Madrid stock exchange.
Ono's board is expected to discuss the existing IPO plans at Thursday's meeting. If Vodafone can complete an agreement with Ono's majority shareholders, that proposed offer would also be discussed, according to one person with direct knowledge of the matter.
Representatives for Vodafone and Ono declined to comment on the takeover rumours.
Vodafone's prospective bid for Ono is the second multibillion-dollar takeover effort in Europe's telecoms industry this week.
On Thursday, the French media and telecoms conglomerate Vivendi said it had received two offers for SFR, its cellphone unit, that could value the business at more than $20 billion. The rival bids were made by the European cable and cellphone operator Altice and the French construction and cellphone company Bouygues.
Despite Europe's tepid economic recovery, the Continent's cellphone and cable sectors have provided some relief for local deal makers.
Announced takeovers involving such companies have reached $194 billion in the 12 months through March 7, a fourfold increase from the period a year earlier, according to data from Thomson Reuters. The figure is somewhat skewed because of Vodafone's $130 billion sale of its 45 per cent stake in Verizon Wireless last year.
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* The private equity-backed Ono, which sells fixed and mobile phone, TV and internet services, had been preparing a listing that would value the company at Euro7 bn ($9.6 bn), including debt. The plan would be cancelled if Vodafone's bid is accepted
* Sources said Vodafone's bid would have to be substantially higher than that value to persuade Ono to drop the listing
* Vodafone, which is already present in Spain, held talks and made an initial offer to some of Ono's private equity owners in January, sources earlier said
* Ono has 1.9 mn customers on its cable network that covers 70% of Spain, or 7.2 mn households out of a total of 16 mn
* Investment funds Providence Equity Partners, Thomas H. Lee Partners, CCMP Capital Advisors, and Quadrangle Capital own 54% of Ono
* For Vodafone, a purchase of Ono would be its third acquisition in fixed broadband in Europe in two years
©2014 The New York Times News Service
