Spanish cable company Ono has slowed its IPO plans in order to discuss a possible sale of the company to Vodafone, according to sources.
The UK-based mobile group is believed to have approached Ono with an improved offer to acquire the company, which appears to have made Ono reconsider its options. Ono received shareholder approval to proceed with an IPO this week.
Sources told Bloomberg that Ono now plans to postpone its announcement regarding an IPO and related investor meetings from this week to next, as it negotiates with Vodafone.
Vodafone increased its previous €7 billion offer for Ono to €7.2 billion, and could improve the offer further by 17 March, according to the sources.
The discussions between Vodafone and Ono are believed to be focused on agreeing a price, particularly the equity value of the deal, along with compensation if the deal doesn’t go through.
Reuters reported earlier this week that Vodafone had reached a preliminary deal with Ono as a result of its improved offer. A source said a meeting between Ono’s shareholders and Vodafone Group CEO Vittorio Collao was held last week, with due diligence expected to make the offer binding.
Vodafone’s interest in Ono is connected to its quad-play strategy in Europe, in which it is looking to offer fixed and mobile services, along with broadband and TV.
It acquired German cable provider Kabel Deutschland for €7.7 billion last year and faces competition from Liberty Global for European cable assets.
Vodafone Group has cash to spare after it sold its 45 per cent stake in Verizon Wireless for $130 billion to Verizon Communications. Vodafone’s Colao recently said the group has the ability to spend between $30 billion and $40 billion on acquisitions over the next few years.