Liberty Global buys stake in Dutch cable operator
US cable giant Liberty Global said Thursday that it has paid more than a half billion euros for a minority stake in Dutch cable operator Ziggo, the latest step in Liberty's march into strategic European markets.
Liberty Global "has acquired 25.3 million shares in Ziggo from Barclays Capital Securities Limited... for a total investment of approximately 632.5 million euros," or about $807 million, the Colorado-based cable group said in a statement.
"As a result of this investment, Liberty Global owns 12.65 percent of Ziggo, based on the shares outstanding as of December 31, 2012," it added.
The announcement came just over a month after Liberty said it would acquire Virgin Media in a stock and cash merger valued at $23.3 billion. That mega-deal would cover 47 million homes and serve 25 million customers in 14 countries.
The purchase of a stake in Ziggo, the Netherlands' largest cable operator which serves around 2.8 million households, was "an attractive opportunity to make a strategic investment in a market where it already enjoys a sizeable presence," Liberty said in reference to Ziggo.
Further sweetening the deal was a roughly 7.4 percent dividend yield on Ziggo shares, which was "implied by Ziggo's expectation that it will pay 370 million euros of dividends during 2013," Liberty added.
The deal will be financed with a loan and existing liquidity, the group said.
"As the transaction does not result in Liberty Global obtaining a controlling interest in Ziggo, no regulatory approvals are required," it noted.
Ziggo reacted in a short statement that said its board took note of the deal.
"We have been informed of the step," Ziggo spokesman Martijn Jonker told AFP.
"We will continue to focus on executing Ziggo's strategy in the best interest of its stakeholders," he added.
Now active in 13 countries, including 11 in Europe, Liberty bought Unitymedia and Kabel BW, the number two and three German cable operators respectively, in 2010 and 2011.
In January, Liberty announced however that it had abandoned an initial public offering for the Belgian company Telenet after only being able to attract 58.3 percent of the capital.