Comment
0
Tweet
0
Print
RSS Feeds

Vodafone Target Kabel Deutschland Doubles Profits

Wednesday - 2/20/2013, 11:11pm  ET

LONDON -- Kabel Deutschland's earnings were released today, with Vodafone said to be waiting on these before initiating negotiations about a potential takeover bid.

The German cable company saw its net profits double for the nine months to Dec. 31, 2012, rising to 200 million euros for the period. Sales were up 8.3% to 1.3 billion euros, while earnings per share climbed to 2.25 euros, up from 1.11 euros a year earlier. Kabel Deutschland also announced its plan to raise its dividend by 67% to 2.50 euros per share, with the money coming after its bid for fellow cable operator Tele Columbus was thwarted by Germany's antitrust regulator.

Today's positive trading statement from the Germany cable company should make it that bit more appealing to Vodafone. Indeed, according to Reuters, "a person with direct knowledge of the matter" has claimed that Vodafone has enlisted longtime banking advisor Goldman Sachs to advise on strategic options relating to its potential bid for Kabel Deutschland.

In response, another source claims that the German cable company is said to have hired Morgan Stanley and Perella Weinberg to advise on its strategy should the takeover bid transpire.

The move would enhance the British-based multinational telecommunications company's strategic options, as Vodafone currently owns largely mobile operations in Europe and rents lines from Deutsche Telekom in Germany, while the German telecoms market has proved resilient amid a turbulent economy across the continent.

All companies concerned have so far declined to comment on the news, but the takeover speculation continues to have an impact on Vodafone's share price, dropping 0.5% today to 162.67 pence, despite winning a mammoth 790 million pound contract for 4G mobile spectrum here in the U.K., along with four other competitors.

If you invest for income but already own shares in 5.8%-yielding Vodafone, you may wish to read this exclusive in-depth report about another high-income opportunity within the FTSE 100.

The blue chip in question offers a 5.7% income, might be worth 850 pence versus around 690 pence now -- and has just been declared the "Motley Fool's Top Income Stock For 2013"! Just click here to download the report -- it's absolutely free.

link

This article was originally published as Vodafone Target Kabel Deutschland Doubles Profitson Fool.com

Copyright © 2009 The Motley Fool, LLC. All rights reserved.