(Corrects headline, adds dropped "with" in paragraph 6)
FRANKFURT/LONDON, June 19 Vodafone is
discussing a bid of about $10 billion with Germany's No. 1
cable operator Kabel Deutschland and is confident its
raised all-cash offer and absence of antitrust issues put it in
a better position than rival Liberty Global, two sources
familiar with its thinking said on Wednesday.
Liberty Global, which owns Unity Media, Germany's
No. 2 cable operator, made an 85-euros-a-share offer on Tuesday,
two people familiar with the matter said, just days after
sources said Vodafone had offered 81-82 euros a share or 7.2
billion euros ($9.6 billion) in cash.
Vodafone is now mulling an offer of about 85-86 euros a
share, or at least 7.5 billion euros, a separate source close to
the company told Reuters on Wednesday.
The British mobile operator had considered raising its
initial offer before Liberty Global joined the bidding race, one
source close to the matter said last week.
Vodafone wants to buy the cable company so that it can offer
television, fixed line and broadband services to more of its
mobile customers, while Liberty Global wants more consolidation
in one of its best performing markets.
"Vodafone has told Kabel Deutschland they are working on an
improved bid. There is still nothing concrete on the table,"
said one of the sources familiar with Vodafone's thinking.
A third source said Vodafone was confident its offer would
succeed as it has less risk and is all in cash.
"Kabel Deutschland shareholders are not keen to accept the
risks of an offer which includes a share portion and the risk of
waiting 9-12 months on regulatory approval," the person said.
A Liberty Global deal would be closely scrutinised by German
monopoly watchdog. Germany's competition regulator in February
blocked Kabel Deutschland's bid to take over smaller
Berlin-based cable group Telecolumbus for 618 million euros.
Vodafone declined to comment and no one at Kabel Deutschland
was immediately available to comment.
Kabel Deutschland shares were trading 0.5 percent higher at
85.90 euros by 1000 GMT, after hitting a high of 86.31 which
values the group's equity at 7.6 billion euros.
($1 = 0.7467 euros)
(Reporting by Alexander Huebner and Harro ten Wolde in
Frankfurt, and Sophie Sassard and Paul Sandle in London; Editing
by Louise Ireland and Erica Billingham)