Liberty Global, the company controlled by billionaire John Malone, has agreed to fully take over Dutch broadband provider Ziggo NV for €4.9 billion to cement its dominance in Europe's cable industry. Ziggo investors will receive €34.53 for each share -- including €11 in cash and the remainder in Liberty Global stock, the companies said today. That's 3.8 per cent more than the January 24th close.
Ziggo, which fell as much as 6.7 per cent today, is understood to be seeking €3.7 billion of loans to finance its buyout. With 2.7 million customers, Ziggo allows Liberty Global to combine the business with its UPC cable unit to take on Dutch carrier Royal KPN NV. Liberty Global is the owner of Ireland's UPC telecommunications operation.
European cable and fixed-line assets are attracting buyers, with Vodafone Group acquiring Kabel Deutschland Holding for more than $10 billion in October -- beating an offer from Liberty Global -- to bolster its fixed- line business in Germany.
“It’s a fair offer,” said Emmanuel Carlier, an analyst at ING Groep in Brussels. “That the shares are falling is due to the offer being for a large part in stock, some people can’t or don’t want to have US stocks.”
Liberty Global has sought to extend its reach in Europe, acquiring the UK's Virgin Media Inc. last year for about $16 billion. The company also operates in Germany, Switzerland, Austria, Belgium and Ireland as well as eastern Europe. It's also studying a spinoff of its Latin American businesses, a move that would make London-based Liberty Global a purely European cable company.
Together, UPC and Ziggo will be the leading provider of communications services in the Netherlands, the companies said in today’s statement.
"Our combined operations will reach over 90 per cent of all Dutch households allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands, and at the same time generate significant revenue and operating efficiencies," Liberty Global chief executive officer Mike Fries said.
Bloomberg
