Liberty Global’s chairman John Malone has come out in favour of a possible tie-up with Vodafone in Western Europe, calling such a move a “great fit”.
Speaking to Bloomberg, he said: “We’ve looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies”.
Malone spoke about the possible benefits of a deal in markets such as Germany, the UK and the Netherlands.
Vodafone’s equity is valued at $93 billion, or twice that of Liberty’s $45 million, with the latter’s enterprise value including debt was some $88 billion.
Like Vodafone’s chief executive Vittorio Colao at yesterday’s results conference, Malone refused to confirm whether the companies are in discussions. However, he did make the important point that Liberty and Vodafone had very different views about they should capitalise themselves.
“Their philosophy is low leverage, low risk and high cash payout to their shareholders. I prefer to grow equity value.”
A possible deal between Liberty and Vodafone has been on the cards for a number of months, with the former becoming increasingly interested in mobile and latter now a major player in the TV industry, with 9.1 million customers.
Malone said he was of the view that a deal between the two companies could create “enormous shareholder value if we could work it out”.