LONDON/FRANKFURT Liberty Global (LBTYA.O) has edged ahead in the auction for German cable operator Kabel Baden Wuerttemberg KBWHL.UL, people familiar with the matter said, trumping an offer from buyout firm CVC CVC.UL.
Media mogul John Mallone's Liberty Global, which already owns larger German cable company Unitymedia IESYG.UL, raised its bid to around 3.1 billion euros ($4.4 billion) on Saturday, making it narrowly higher than CVC's 2.95 billion euro offer.
A third offer from buyout firm Hellman & Friedman was beaten by both last week.
Swedish buyout firm EQT (EQT.N), backed by the Wallenberg family, had been due to decide whether to sell KBW this weekend, but could now take a while longer given the higher offer, one person said.
"The poker games goes on," the person said.
A second person said, "We don't know if CVC is going to raise its bid again."
EQT, which shelved plans last week to float Danish outsourcing firm ISS, had been looking at a possible stock market listing for KBW at the same time as exploring a sale.
The market turmoil in the aftermath of the catastrophe in Japan and fighting in Libya has rocked financial markets, taking potential IPOs off the table, however.
The second person added that there were significant antitrust issues facing Liberty Global's bid, which would bring together Germany's second and third-largest cable companies.
The German cable industry has been constrained by regulation that effectively bans consolidation among large players.
Kabel Deutschland KD8Gn.DE, Germany's biggest cable operator, in 2004 tried to merge with Kabel Baden-Wuerttemberg and Unitymedia to create a sizeable rival to telecom group Deutsche Telekom (DTEGn.DE).
Antitrust authorities thwarted the plans, and the Federal Cartel Office has repeatedly said that it believes a merger of the large cable companies is problematic.
Financing for a takeover of KBW is expected to exceed six times its earnings, other people said on Friday, with the package set to include loans and high-yield bonds.
A third person said on Saturday that debt for a Liberty Global offer would have to be placed in escrow until German regulators had approved a deal.
"Regulatory approval can take months and what if the authorities turn round after that and say no?," that third person said.