Vodafone (VOD), the world's second-largest mobile operator, has agreed to acquire German cable group Kabel Deutschland (KD) for €7.7bn in cash, or €87 a share. Strip out potential cost-saving synergies and the offer values KD at an enterprise value to forward earnings ratio of just over eight, which represents a decent long-term deal for Vodafone given the pricey ratings in the cable sector at present.
IC TIP:
Buy
at
180p
The main attraction of the purchase - Vodafone's biggest since 2007, and its second acquisition of a cable operator in less than a year - is that it should bolster German customer numbers by enabling the group to offer bundled deals on TV, mobile and broadband services.
