Liberty Global Chairman John Malone said a tie-up with Vodafone would be a “great fit” in western Europe. “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 with respect to western Europe,” Malone said in an interview with Bloomberg. Comparing Vodafone to “a big banana in the jar,” Malone said: “The question is: how do you get your hand out of the jar with the banana."
Malone cited benefits of a merger in markets such as Germany, the UK and the Netherlands. He declined to comment on whether the companies are in discussions. He added that one of the main issues in such as deal would be the two companies' different approach to financing. While Vodafone favours "low leverage, low risk and high cash payout" to shareholders, Liberty Global prefers "to grow equity value”, Malone said.
In the interview, Malone also said Liberty Global would buy mobile operators in countries where its presence is big enough, such as the Netherlands. Last month Liberty Global agreed to acquire Belgian carrier Base, its first acquisition of a mobile network operator.
At the presentation of its annual results, Vodafone CEO Vittorio Colao was asked several times about the likelihood of a link-up with Liberty Global. “If we find things that make sense, whether it’s Liberty or Hellas Online or whatever, we will look and consider and if there aren’t, we continue with our organic strategy,” he said during a conference call. He declined to comment whether there are ongoing discussions with Malone’s company.
