Liberty Media made a last-ditch effort yesterday to salvage its €5.5bn (£3.4bn) purchase of Deutsche Telekom's cable assets by pledging massive investment in the network and attacking the regulator that looks set to block the deal.
However, analysts said the flurry of statements from Liberty did not address the central concerns of the German cartel office. Liberty said it would invest €8.3bn (£5bn) on upgrading the cable system, which carries TV, but it did not meet the watchdog's demand that the network must be made capable of carrying voice traffic.
It meant that Compere Associates, a private equity firm based in London, stepped forward more confidently as a potential alternative purchaser of the business. This divestment is considered crucial to reducing Deutsche Telekom's debt mountain.
Tom Crema, a partner at Compere, said his firm would not quibble with the €5.5bn price tag. He added: "We do believe our model will be acceptable to the regulator."
Mr Crema did not disclose how much Compere was willing to spend on a voice upgrade programme or who the firm's fellow consortium members are.
Friday was the deadline for Liberty to make its final submission to the German regulator, at which time Liberty said it would not be making fresh concessions to get the deal through. The cartel office will make its decision on the proposed transaction by the end of this month.
Liberty, which is headed by the media tycoon John Malone, said in a statement: "Something must have gone badly wrong if a review of the case so completely ignores the advantages to competition that this merger would bring about."
The German economics ministry has the right to overrule cartel office decisions in cases of national interest. However, Frank Montag, Liberty's lawyer, said the company would not use that option.
Mr Montag told a press conference in Frankfurt: "No one sitting in Denver [Liberty's base] who's planning to invest €13.8bn in a far-away land will wait for a government decision when he knows he has the cartel office on his back forever."Reuse content