Liberty Mulls Exit from Deutsche Telekom Deal as Compere Hovers

03 December 2001

Speculation has mounted that Liberty Media may pull out of its E5.5 billion purchase of Deutsche Telekom’s cable-TV assets if it meets a regulatory veto – with London-headquartered investment firm Compere Associates ready to bid if the deal collapses.

The US group expects to be informed of the German cartel office’s decision next month. Reports last week suggested that the deal had received an icy reception from regulators, to add to opposition from other German media groups [WAMN: 22-Nov-01; 30-Nov-01].

Should Liberty pull out, Compere – a small finance house specialising in telecoms – revealed it would waste no time in stepping into the breach. “We would be prepared to enter straightaway to make an offer,” revealed the firm’s founder Phil Mochan, who added that “[Liberty’s] price seems appropriate.”

However, Mochan declined to disclose the identities of the private investors funding the bid. “Our financial sources insist on strict discretion. Should Deutsche Telekom invite us to make an offer we will immediately put the names forward.”

Compere estimated that a deal with Telekom could be concluded by mid-2003. It vowed to invest around E7bn over three to seven years, compared with the E500–E700 million a year to 2010 pledged by the current bidder. Continued Mochan: “Liberty’s plans are very conservative. We are far more aggressive.”

Telekom desperately needs a deal with somebody, requiring the cash to reduce its enormous debts.

News source: Financial Times