Liberty Global buys Ziggo to expand European cable empire
By Anthony Deutsch and Philip Blenkinsop
UTRECHT, Netherlands/BRUSSELS (Reuters) - U.S. cable group Liberty Global has won its 10-month pursuit of Ziggo with a deal that values the Dutch operator and its debt at 10 billion euros ($13.7 billion) and expands billionaire John Malone's vast European cable empire.
Ziggo rejected an initial offer from Liberty last October as too low, seven months after the U.S. group controlled by Malone first bought shares in its Dutch target.
On Monday, Ziggo accepted a cash-and-shares offer at 34.5 euros per share, a 22 percent premium to Ziggo's share price just before Liberty's initial bid.
Liberty has been driving consolidation of the European cable market to profit from rising demand for faster Internet and digital television.
The company, which gets over 90 percent of its revenue in Europe, has built its position via acquisitions from Ireland to Romania over the past decade and already owns 28.5 percent of Ziggo as well as the whole of Dutch peer UPC.
Combined with UPC, Liberty will reach 7 million people or about 90 percent of Dutch homes, and challenge former state monopoly KPN in mobile and for business customers.
Ziggo's shares were down 2.6 percent at 32.375 euros at 1633 GMT, compared with a 1.3 percent decline in the STOXX European telecoms index. Liberty shares were down 2.7 percent.
Rabobank analyst Frank Claassen said Ziggo's share price may have reflected over-optimistic investor expectations about the impending offer. Continued...