Reuters: Private Equity: UPDATE 1-Sale of German cable firm Primacom launches -sources

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UPDATE 1-Sale of German cable firm Primacom launches -sources May 25th 2012, 17:26 Fri May 25, 2012 1:26pm EDT * Information packets sent to small group-sources * Primacom owners hope to fetch at least 400 mln euros * Kabel Deutschland CEO says will not take part in bidding FRANKFURT, May 25 (Reuters) - The owners of Primacom are accelerating efforts to sell the German cable company, two people familiar with the matter said, adding to a string of deals in Germany's once-fragmented cable market. The people said information packets have been sent to a small group of potential bidders, adding indicative bids were expected before the summer break. The sale of Primacom comes only a few days after bellwether Kabel Deutschland snatched up Tele Columbus for 618 million euros ($778 million), and after the takeover of Kabel BW by Unitymedia, owned by Liberty Global. One of the people said Primacom was expected to draw bids from the companies that showed interest in Tele Columbus - Kabel Deutschland, Deutsche Telekom and Unitymedia. A spokeswoman for Unitymedia declined to comment on whether the company was interested in buying Primacom, but said: "We think that further consolidation in the cable industry is necessary." Deutsche Telekom and Primacom declined to comment. Investment bank Jefferies Group, which is advising Primacom's owners, also declined to comment. Kabel Deutschland Chief Executive Adrian von Hammerstein told Reuters his company would not take part in the bidding, a move which is seen as a gesture to the competition regulators, who are in the process of evaluating the Tele Columbus deal. Primacom's owners, a group of former creditors including ING Groep and fund managers such as Alcentra Group, Tennenbaum Capital and Avenue Capital, hope to sell the business for at least 400 million euros. They acquired Primacom in a debt-equity-swap early last year following the insolvency of its parent, Primacom AG the year earlier. "The fact that Tele Columbus' owners slightly exceeded their targeted 600 million (euro) price tag gives Primacom's owners hope of being just as successful," one of the two sources close to the transaction said. A telecoms banker cautioned, however, that Primacom may not prove to be as contested as Tele Columbus as it was mainly present in eastern Germany where average revenue per user tends to be lower than in the western parts of the country. Primacom posted sales of 78 million euros in 2010 and earnings before interest, taxes, depreciation and amortisation of 28 million euros. It is due to publish 2011 financial results in the next two weeks. Primacom's current debt stands at around 350 million euros. Link this Share this Digg this Email Reprints

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