Quentin Webb and Jeffrey Goldfarb discuss the strategic and financial logic of a possible $90 bln acquisition of John Malone's European cable giant Liberty Global by Vodafone.
After big year event today were heading into the final month this month of the year and there's another big deal being rumored. Vodafone potentially looking at Liberty Global John loans past European empire Clinton you. Wrote about this over the weekend. Tell us what's going on here what's the thinking behind us well all the kind of can't drop in the air and European telecoms of them I've been the thing that's put the caps on the pitch insists. BT which you speak just to kind of fixed line business in the UK is looking at buying in my evolve plan. That's rattled by defensive big. Claire in UK might borrow and one of the many. Options that sets the considering is that built by Liberty Global which is a kind of enormous as you say pan European cable operates. Including debts will be worth something of the order of ninety billion dollars with a bit of a takeover premium in the. So as to be one of the biggest deals without the biggest deal we've seen it. This year do you think there's some sound strategic logic took the finances we talk a little later that little bit messy about what's compelling strategically for Vodafone about the us. Well the very different thoughts and found itself in a pretty uncomfortable position as a kind of my ball underneath player in the last few years what's happened is that. People have become increasingly willing to buy bundles. Packages of kind of land line my vile coupon and and and TV altogether. And say companies that come off about how the bit of an advantage in winning customers and retaining they're not an anti trust. Potential problem there or in this case yet I'm not so interesting question because in the costs and faith very fine and that Tia pagan. German table and in the past German officials have blocked a couple of fails so. Maybe site I was disposals where we'll say guard to be one issue or the other way could get done is that this is actually kind of European. Level failed and in fact in Brussels people nowadays think. We need some big powerful European champions face all kind of Nokia fate enough things they look at the size of Google and FaceBook and they look at the kind of Paula states of European telecoms and media in this I actually we would love some consolidate. Vodafone might actually find itself some friends it's enough to conceivably I mean out of finance living job alone made this very same trade in the United States interestingly in 1999 when he sold. His massive cable business to AT&T and other Telecom provider for about fifty billion dollars but you're saying the finances here. Little bit more. Question well this is all kind of on the drawing board at the moment but I'm in one messed my which I'll be seen that Canadian bank made recently basis that it might take you next several years for this kind of feed through into Kona hi and experts have to shareholders in the meantime for a difference that would become very high for kind of traditional blue chip company. Patents dividends would promise not to be a big problem because. Undermines the very kind of yield the company a pays a part 5% dividend yields have those investors and not necessarily damp for kind of fight you at bats on. Contagion technology. Threat but suffered a fun one to keep an eye on as we head into the the end of the year will be back. With more Britain used.