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 €3.417 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 to €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
Asked during Vodafone quarterly results conference call last week to comment on the merits of acquiring versus building fixed-line assets in Spain, CEO Vittorio Colão said that there was a trade off between the cost of acquiring assets in a short time period and building, which could be cheaper but would take longer.
“And at the end of the day, there is a breakeven point at which you say, ‘Well, this one, I would prefer, but at this price, it’s too expensive. And the other one is a lot of hard work, but at these conditions, it is cheaper’,” he said.
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