Vodafone Group Plc has made an informal acquisition offer to Germanys largest cable company – Kabel Deutschland Holding AG according to Bloomberg report citing people familiar with the matter. The telecom company competes with Jihn Malones Liberty Global Inc. which also declared interest. Vodafone sees opportunity to grab 8.5 million connected households and combine its mobile offers with fixed line services.
The complementary services are in the core of keeping customers satisfied and loyal to the brand. “Wireless services in Europe are under tremendous pressure,” Chetan Sharma, an independent wireless analyst, said in a telephone interview for Bloomberg. “They need to offer quad play to keep their customers for a longer period of time. As you start to bundle, you typically see the lifetime value of a customer increase by 50 percent. It’s harder for the customer to leave.”
The takeover official discussion hasnt yet started as the German cable company considers Vodafones offer to be too low at the moment. Sources told Reuters that in February the telecom was ready to pay 10 billion euros for the acquisition.
Last month company signed a deal with Deutsche Telekom to get access to German carriers internet lines. Analysts had expected talks with Kabel to cease after this deal allows Vodafone to offer pay-TV over high-speed broadband to its German customers.
Companys shares closed yesterday at $29.86, reporting 3.64% daily increase.
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