BERLIN — While Liberty Media is reportedly looking to make a second bid for Deutsche Telekom’s cable assets, Colorado cabler Callahan looks set to call it quits in Germany.
Company’s Teutonic subsidiary, Kabel Baden-Wurttemberg, has halted work on the technical upgrade of regional cable lines in the state of Baden-Wurttemberg, which Callahan purchased from Deutsche Telekom last year.
A spokeswoman for KBW said a decision was expected in the fall on whether the upgrade would continue at all.
Callahan may throw in the towel and return the cable franchise to Deutsche Telekom. Callahan’s other German subsidiary, Ish, is having similar financial troubles in North Rhine-Westphalia.
It had banked on Liberty’s winning its $5.4 billion bid for six of Deutsche Telekom’s nine regional cable systems and embarking on nationwide upgrade with other cablers. That move was blocked by German antitrust authorities earlier this year, however.
Liberty topper John Malone is reportedly trying to assemble a new consortium to have another go at Deutsche Telekom’s cable assets. Company is said to have approached international investment groups Apax Partners and Apollo Management.
Time may be right
Analysts reckon Liberty may have an easier shot this time around: Facing a tough election in September, the government of German Chancellor Gerhard Schroeder is on the ropes while the country’s telco and media markets remain comatose.
The partially state-owned Deutsche Telekom is under increased pressure to cut its pile of debt and shore up losses following the resignation of chief exec Ron Sommer, who ankled Tuesday after a much publicized battle of wills with Schroeder.