Reports of Malone backing out not true, reps say
Deutsche Telekom and Liberty Media moved Wednesday to quash rumors that their $5 billion cable deal may be in jeopardy as Liberty topper John Malone frets about possible interference by German anti-trust authorities.
Reports early in the day had Malone threatening to back out of the agreement if the German government didn’t assure the partners there would be no regulatory roadblocks. But reps for Denver-based Liberty Media and Deutsche Telekom insisted that the agreement is on track and could close in several weeks.
Malone himself expressed confidence last week during a conference call with investors that the transaction, which has Liberty buying six of Deutsche Telekom’s regional cable systems, would be clinched in short order.
The move, which would give Liberty 10 million cable subscribers in Germany, is part of the group’s larger focus on the European cable biz, where it has been snapping up assets in short order. Liberty is a major shareholder in Amsterdam-based United Pan-Europe Communications, Europe’s largest cable company and has as big a stake in the U.K.’s Telewest.
Liberty is also reportedly in talks to buy PrimaCom, Germany’s fourth largest cable operator.
Germany’s Economics Ministry, which generally deals with antitrust issues for the government, hasn’t been contacted by Liberty Media either formally or informally about the acquisition, a ministry spokesman said.
Liberty’s shareholders are the ones who appeared the most worried at the aggressive overseas cable play since many of the businesses in question are laden with debt and require heavy cash outlays to upgrade systems for new services like telephony and high-speed Internet access.
Malone and German chancellor Gerhard Schroeder are scheduled to meet in mid-September and will likely address the issue of Liberty’s growing cable footprint. Liberty is also reportedly planning a press conference Sept. 18 in Munich to introduce Malone to the German media.
Liberty was recently spun off from U.S. telecom giant AT&T. It’s wide-ranging investments include interests in News Corp., Time Warner, USA Networks, Starz-Encore, Discovery Communications, broadcaster Telemundo and a host of other content and technology plays. Some have suggested that Malone’s overlapping media holdings could run afoul of anti-trust authorities within the European Union, where competition czar Mario Monti has been vigilant in policing trans-Atlantic deals.
(Dow Jones contributed to this story)