Vodafone Group sought to dampen speculation about a potential bid for international cable company Liberty Global during an analyst and investor meeting this week.
The reports of a potential bid emerged after UK telecoms giant BT revealed it was in discussions with UK mobile operators EE and O2 about a potential acquisition.
If one of these deals came to pass, BT would be able to offer mobile services alongside fixed voice, broadband and pay-TV in the UK, putting Vodafone at a disadvantage.
Liberty Global owns Virgin Media in the UK, which offers pay-TV, fixed voice and broadband, as well as the Virgin Mobile MVNO services. Buying the company would give Vodafone a way to compete in the quadplay space should BT add a mobile network to its armoury.
Nick Delfas, an analyst with Redburn who attended the Vodafone meeting, said in a note that it would be too difficult for the two sides to agree financial terms.
He argued that Vodafone is “highly rational” about M&A activity and doesn’t need to do anything. He also expressed doubt that Vodafone would be interested in acquiring Sky or TalkTalk, both of which would boost its quadplay ambitions in the UK.
The Bloomberg report suggesting the interest in Liberty Global stated that Vodafone was analysing the financial and regulatory issues that may need to be overcome, as well as potential shareholder support for such a deal. It is said to be concerned about the debt levels of the combined company.
However, no formal negotiations were believed to be taking place with Liberty and there is no guarantee of an agreement being reached.
It was also reported this week that Vodafone is in advanced discussions to acquire UK-based video streaming service Blinkbox, which is currently owned by Tesco.
Despite reporting a £18.5 million loss in its most recent annual accounts filing, Blinkbox would give Vodafone a foothold in content for its entry into the broadband and pay TV market.
In September, Vodafone Group CEO Vittorio Colao said the company would consider a “transformational” merger or acquisition in the future if the price was right. A possibility of a tie-up with Liberty Global was first mooted a year ago.
Vodafone has been expanding its fixed presence across Europe, including last year’s €7.7 billion acquisition of cable company Kabel Deutschland in Germany, for which it defeated a rival bid from Liberty.
It also acquired Spanish cable service provider Ono for €7.2 billion in March and reached a fibre-sharing agreement with rival Portugal Telecom in July. Most recently, it inked a deal to acquire a majority stake in Greek fixed and broadband player Hellas Online.