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Report: Vodafone tables €7bn ONO offer

Mobile telecom giant Vodafone has reportedly tabled a €6.9 billion (US$9.4 billion) bid for ONO.

According to Spanish newspaper Expansión, citing sources close to the process, the cable operator’s board will consider the all-cash offer for 100% of the company’s capital today.

The deal would include ONO’s €3.42 billion of debt, leaving about €3.48 billion for the company’s private equity majority owners – CCMP Capital, Providence Equity Partners, Thomas H Lee and Quadrangle – who together control 54% of ONO’s capital.

However, according to the sources, ONO’s owners are still considering the alternative of an IPO, which could offer better value.

According to Reuters, banking sources have indicated that Vodafone would need to come up with an offer equivalent to 10-12 times the company’s EBITDA of €752 million to produce something that was definitively better than the IPO alternative, meaning a bid of between €7.5 billion-€9 billion.

The average going price for cable operators in recent months has been estimated at about 9.5 time EBITDA.
Vodafone has plans in place to launch a fibre offering in Spain in April, with a target of passing three million homes by mid-September.