BERLIN — Deutsche Telekom has denied reports that the planned sale of six regional cable systems to U.S. cable Liberty Media and its U.K. partner Klesch has run aground.
On Friday, the Financial Times Deutschland reported that Liberty chief John Malone wanted to renegotiate the 5 billion euro ($4.3 billion) deal to which the parties agreed in a letter of intent signed in February.
Malone intends to cut the amount of cash DT will receive — set at 50% of the price, according to the original deal.It would be bad news for Deutsche Telekom if the sale, due to close July 1, faltered. Company has already included the $4.3 billion expected from the Liberty deal in its current year figures. DT was expecting $9 billion-$12 billion from the sale of assets this year.
With Liberty’s Dutch subsidiary UPC having generated net losses of about $1.7 billion last year, the company is tightening its belt. In February, Liberty injected some $750 million into UPC.
Industry watchers say it’s a good time for Malone to play his hand: Deutsche Telekom is hard up for cash, and with the cable market on a downturn, finding new investors won’t be easy.
The cable sale promises to be a highlight at the DT shareholders’ meeting Thursday.