Speculation mounts on Euskaltel bid for Telecable

Speculation is mounting that Basque region cable operator Euskaltel could make a bid for Asturias operator Telecable following a reported postponement of the deadline for bids for the latter by private equity owner Carlyle from July 13 to July 24.

The postponement is seen as giving time for Euskaltel to do the necessary due diligence to make a bid, possibly involving the third northern Spanish operator, Galicia-based R, after being preoccupied with its own IPO at the start of the month.

Other possible bidders for Telecable include private equity groups BC Partners, Providence Equity and Advent, along with industry giants Vodafone and Orange, both of which have made significant acquisitions in the form of Ono and Jazztel respectively.

The owners of Telecable, headed for the last couple of months by CEO Alejandro Martínez Peón, has reportedly been looking for a price that would amount, at a minimum, to nine times 2014 EBITDA of €63 million, giving a total of €560 million.

Euskaltel president Alberto García Erauzkin has meanwhile purchased €2.5 million worth of his company’s shares amidst some reported criticism of the bonuses awarded to the cable operator’s management for the successful IPO. After rising on its July 1 debut, Euskaltel’s shares have struggled to make headway since, despite a rise in the overall value of Spanish stocks. Goldman Sachs and Morgan Stanley have reduced their stakes in the operator since the IPO.