Global cable operator Liberty Global, Inc. (LBTYA: Quote, LBTYB, LBTYK) is set to float a near $2.5 billion bid for the remaining 48.9 percent stake it does not hold in Belgian broadband cable operator Telenet Group Holding NV (TLGHF), according to the Wall Street Journal on Wednesday. The proposed bid values the whole of Telenet at about $5.2 billion.
Telenet is majority owned by Englewood, Colorado-based Liberty Global, which acquired a 51.1 percent indirect controlling ownership interest in 2007 for about $931 million.
Telenet provides analog and digital cable television, high speed internet and fixed and mobile telephony services, primarily to residential customers in Flanders and Brussels in Belguim. It has been listed on the Euronext Brussels stock exchange under the ticker symbol TNET since October 2005.
Liberty Global intends to reportedly launch a 35.00 euros or $45.67 per share bid for the remaining stake in Telenet as early as Thursday. The offer price represents a 12.5 percent premium to Telenet's closing share price of 31.10 euros on Wednesday in Brussels.
The proposed deal is part of Liberty Global's plans to boost its presence in Europe. Liberty Global provides video, broadband Internet, and telephony services to 20 million customers across 14 countries, primarily in Europe, Chile, and Australia.
The company completed the acquisition of German cable company Kabel Baden-Wuerttemberg GmbH in mid-December 2011 for an enterprise value of 3.16 billion euros or $4.10 billion. Germany is seen as Europe's largest and fastest growing cable market.
Liberty Global CEO Mike Fries had said in mid-July that the company is looking for "acquisitions in a market that is desperate for consolidation and it is shifting its strategy to focus on Europe."
"We're always opportunistic with acquisitions, the market is still very fragmented," Fries said. He added that "the EU market, with 7,000 cable operators, is screaming for consolidation."
In order to concentrate more in Europe, Liberty Global also quit the Australian market by selling its 54 percent stake in Australian pay television company Austar United Communications Ltd. (AUN.AX) in May to Foxtel in a deal that valued Austar at A$2.5 billion.
Foxtel is jointly owned by Australian telecommunications giant Telstra Corp. (TLSYY.PK, TLS.AX) with 50 percent stake, a 25 percent stake each for News Ltd., the Australian arm of media tycoon Rupert Murdoch's News Corp. (NWS, NWSA), and Consolidated Media Holdings Ltd (CMJ.AX, CMJFF).
LBTYA closed Wednesday's regular trading session at $57.28, down $0.13 or 0.23% on a volume of 0.79 million shares.
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by RTT Staff Writer
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