Cerberus, Providence to throw spanner in Softbank’s works

16 Mar 2006

US private equity groups Cerberus Capital Management and Providence Equity Partners are planning a USD15 billion rival bid for Vodafone Group’s struggling Japanese unit Vodafone KK, potentially derailing ongoing buyout talks with Softbank Corp. According to sources familiar with the deal, the all-cash offer is expected to be submitted to Vodafone’s board imminently and the two groups are in negotiation with several banks to fund the deal; Cerberus is said to be trying to borrow between USD8.5 billion to USD13.5 billion for the purchase.

Earlier this month it was announced that Softbank Corp had reached a basic agreement to buy UK-based Vodafone Group’s approximately 98% stake in Vodafone KK, in a deal which, if completed, would be the largest ever acquisition by a Japanese company. Vodafone confirmed it had agreed in principle to sell off the unit, and thus exit the market, and Softbank said it aimed to reach a final agreement with the UK operator by end-March. Industry sources say the Cerberus, Providence bid is unlikely to match Softbank’s offer, but it could raise the stakes for Softbank if they do decide to bid higher.

Japan, SoftBank Corp, Vodafone Group