John Malone’s Liberty Global Inc. (LBTYA:US) purchased a 12.7 percent stake in Dutch cable-television operator Ziggo NV from Barclays Plc (BARC) after the British bank failed to find enough buyers last week in a share sale.
Liberty Global paid about 632.5 million euros ($807 million), or 25 euros a share, to Barclays’s investment-banking unit, the company said today. Ziggo shares rose almost 12 percent to 27.15 euros at 12:27 p.m. in Amsterdam.
Malone’s cable giant has been acquiring European cable assets to expand in the continent’s pay-TV market. Last month, the Englewood, Colorado-based company agreed to buy the U.K.’s Virgin Media Inc. for $16 billion, the biggest media transaction since 2007.
“There is certainly long-term logic to a merger of Liberty Global and Ziggo,” Bernstein Research analyst Robin Bienenstock wrote in a note today. A bid for Ziggo is unlikely in the near term because Liberty Global is busy acquiring Virgin Media, she wrote.
Barclays was left with a 697 million-euro stake after managing a sale for owners Warburg Pincus LLC and Cinven Ltd. The stake value was based on Ziggo’s March 19 closing price of 24.50 euros a share.
Liberty Global already operates in the Netherlands through its UPC Broadband Holding BV unit, a Ziggo rival.
The Ziggo stake “is also financially attractive given the stock’s approximate 7.4 percent dividend yield,” according to today’s statement.
Bert Holtkamp, a Liberty Global spokesman, declined to comment beyond the company’s statement.
Ziggo, which raised 804 million euros in its initial public offering a year ago, will “continue the existing strategy,” said spokesman Martijn Jonker. The board said in a statement today that it will “focus on executing Ziggo NV (ZIGGO)’s strategy in the best interests of its shareholders.”
Ziggo, with 2.9 million TV customers at the end of last year, offers TV, digital pay TV, high-speed broadband Internet and telephone services. It also competes with phone companies including Royal KPN NV and Vodafone Group Plc. (VOD)
Liberty Global’s purchase of Virgin Media, which puts Liberty Global in a dead heat with Comcast Corp. (CMCSA:US) as the world’s biggest cable company, has helped increase the attractiveness of Europe’s cable assets.
Vodafone in recent months has held internal talks about a possible bid for Germany’s Kabel Deutschland Holding AG while Grupo Corporativo ONO SA of Spain said earlier this month it’s prepared to sell shares in an initial public offering when the market for investors recovers.
Once the Virgin Media deal is completed, about 80 percent of Liberty Global’s revenue will come from five countries -- the U.K., Germany, Belgium, Switzerland and the Netherlands, Chief Executive Officer Mike Fries said in February. Liberty Global said it was also considering a European listing.
Barclays held about 28.4 million Ziggo shares as of March 19, representing a 14 percent stake, according to a previous filing posted on the Dutch markets regulator AFM’s website said. Warburg Pincus, Cinven and some co-investors cut their stake in Utrecht, Netherlands-based Ziggo by selling 40 million shares.
Barclays spokesman Jon Laycock declined to comment on today’s deal with Liberty Global.
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