'Technical' issues delay pact; signing may take place next week

BERLIN — Liberty Media’s $4.5 billion deal to buy German telco Deutsche Telekom’s cable systems, due to close this week, has again been delayed, according to local news reports.

Liberty cited “technical” issues and said the deal would be signed in about eight days.

The German company indicated last week that Liberty was attempting to renegotiate more favorable terms as Liberty topper John Malone attempts to take advantage of DT’s weak financial position and falling stock price. Reports also said Malone requested early antitrust clearance from the German government.

“I’m not surprised,” said one U.S. fund manager who owns Liberty stock. “If you’re in a strong position, you’re going to push it as far as you can.”

Malone has a reputation as a particularly aggressive dealmaker. And Liberty’s investment in Germany represents a significant outlay for the Denver-based investment company and is not without risk.

Fighting back

Deutsche Telekom is fighting back with threats of counter-offers. Financial daily Handelsblatt reports London-based finance house Compere is interested in the systems and quotes one of the firm’s partners, Tom Crema, as saying it could strike a deal quickly.

Liberty is poised to buy six of DT’s nine regional networks. The German telco badly needs the cash to help pay down debt.

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