* Companies in talks over 85-86 euro/share cash bid -sources
* Liberty's 85 euro/share offer is partly in stock - sources
* Kabel shares at record high, valuing it at 7.55 bln euros
FRANKFURT/LONDON, June 19 Vodafone is
discussing a 7.6 billion euros ($10 billion) cash bid with
Germany's No. 1 cable operator Kabel Deutschland and
is confident its 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-euro-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 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.
Vodafone and Kabel Deutschland declined to comment.
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 Kabel so that it can offer more competitive,
comprehensive packages with television, fixed line and broadband
services for more of its mobile customers, while Liberty Global
wants to expand 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.
Three separate sources familiar with the negotiations said
an offer from Liberty would include a share component.
"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," one of them said.
Also 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.
A source familiar with the situation said Liberty has
already talked to the German antitrust office to discuss the
deal, but declined to elaborate.
A spokesman for the cartel office said that the regulator
holds talks with cable providers on a regular bases and that no
formal request had been submitted by Liberty Global.
The deal may also be referred for review by the competition
watchdog in Brussels, which reviews large deals in the European
Union and those with potential regional importance.
Kabel Deutschland shares were 0.1 percent higher at 85.61
euros by 1425 GMT. The stock had hit an all-time high of 86.31
euros, valuing the company at 7.6 billion euros.