The British mobile business needs to demonstrate to shareholders that it can find new ways of accelerating growth, and is looking at cable operators so that it can offer customers bundled television, mobile and broadband services.
It has already bought Kabel Deutschland in Germany for this purpose, and senior sources say that buying Liberty would allow it to roll the same strategy out in the UK and other territories, such as Italy.
The mobile business would already be taking a major strategic leap by offering television services, and is unlikely to want to complicate matters further with the Chellomedia content business.
However, the Kabel Deutschland acquisition could yet cause a problem. Liberty mounted a rival bid for the German cable business but backed off after it became clear that German competition authorities would oppose the deal because Liberty already had susbstantial cable assets in the country. Now that Vodafone owns Kabel, it would be likely to face the same hurdle to get its hands on Liberty.
It may not have much time to investigate a deal, however. Last week, Credit Suisse said there was a 50pc chance that AT&T, the American telecoms giant, would make a bid for Vodafone before the end of this year.
The Newbury-based mobile giant would theoretically still be able to explore alternatives, but having an AT&T offer on the table would make the process much more difficult.
Liberty Global surprised investors at the start of this year and gained a valuable foothold in Britain with a $14.1bn deal to buy Virgin Media. The acquisition pits the company directly against BSkyB, and renewed the longstanding rivalry between Mr Malone and BSkyB’s architect Rupert Murdoch.
It would be interesting, but would likely be a poison pill for an AT&T bid. On the upside, Liberty Global operates in the three German states that Kabel Deutschland doesn't, so they could cover all of Germany with their cable footprint. (and many other countries as well)
Maybe this will force AT&T's hand if they're serious.
If VOD bids for LBTYA, there would likely be no equine procreation and thus no birth of a new company. That very attractive young filly might need a name change, wherein betting= banging and bundle= (you figure it out).
I would not be averse to that transaction, as I still believe the rump(double entendre) will provide superior total return going forward.