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Spanish cable firm Ono says oh yes to €7.2bn Vodafone takeover

1.9 million subs... great. But it's really about scrummy fibre

Spain

As has been widely speculated, the Spanish cable company Ono has accepted a €7.2bn (£6bn) offer from Vodafone, dropping its plans for an IPO.

Vodafone is growing its unified communications strategy across Europe and this follows a similar purchase of Kable Deutschland.

The price of 7.5 times EBITA is considered low by some analysts, who point to an industry norm of between 10 and 12 times EBITA, but the sale provides a good return for the four venture funds Anglo-CCMP, Providence, Thomas H Lee and Quadrangle, which invested in 2005.

The Ono brand is well regarded in Spain, offering broadband at 100Mb/s and 200Mb/s with strong fixed telephone and TiVo based subscription TV offers, and this ties in well with Vodafone’s plans to expand its FTTH build out.

The Ono infrastructure will also give Vodafone off-load and back-haul capacity, and of course there is a certain corporate satisfaction in adding 1.9 million subscribers in rival Telefonica’s home territory.

The network covers Andalusia, Aragon, Balearic Islands, Canary Islands, Cantabria, Castile-La Mancha, Castile and Leon, Catalonia, Valencian Community, La Rioja, Madrid, Region of Murcia and Navarra covering 7.2 million homes, but the deal is more about capacity than subscriber acquisition, Ono having spent  €7bn in its network since 1998. ®

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