Private equity houses continue to reign in the European mergers and acquisitions market. Deutsche Telekom’s cable television business is the latest potential mulit-billion euro transaction to whet the appetite of European and US buyout firms.
Six consortia have progressed to the final round of bidding, with Liberty Media the only strategic investor still in the running to acquire the business.
Liberty Media, run by John Malone, had an offer for the business blocked by German regulators earlier this year. Following the failure of the original deal, DT indicated that it would sell its remaining six regional cable companies to financial buyers.
Last month it emerged that Liberty was planning to syndicate a bid for Deutsche Telekom’s assets alongside private equity firms to enable the firm to raise the necessary financing and to appease the German regulatory authorities. Today, the Financial Times reports that Liberty has teamed up with US buyout firm Blackstone Partners and New York firm Apollo to tender for the business, the first round deadline for which passed in late July.
Other parties through to the final round of bidding include a consortium comprising Goldman Sachs and UK private equity firm Permira; US firm Providence Equity and Apax Partners; and London-based CVC Capital Partners, which has teamed up with Warburg Pincus. Hicks Muse Tate & Furst and BC Partners are understood to have submitted their own first round bids.
Liberty Media originally offered to pay E5.5bn for the cable businesses, but offers are now expected not to exceed E3bn. The final date for offers is September 30.
Deutsche Telekom is one of a number of the larger European operators currently struggling with a huge debt burden. The firm has undertaken to reduce its debt by over E17bn by the end of 2003 down to E50bn.