Telecom Lead America: Liberty Global has acquired 12.65 percent stake in Ziggo from Barclays Capital Securities for approximately €632.5 million.
This is the second major investment by Liberty Global in the last 3 months. Recently, Liberty Global said it would buy Virgin Media for approximately $23.3 billion.
Liberty Global says buying 25.3 million shares in Ziggo at €25.00 per share is an attractive opportunity to make a strategic investment in a market where it already enjoys a sizeable presence through its UPC Netherlands subsidiary.
The purchase price is also attractive given the stock’s approximate 7.4 percent dividend yield, which is implied by Ziggo’s expectation that it will pay €370 million of dividends during 2013.
Liberty Global will fund the acquisition of Ziggo shares with a non-recourse margin loan and existing liquidity.
According to recent media reports, Liberty Global was also in talks with Bharti Airtel, India’s # 1 telecom operator, to buy its DTH business in the country.
Meanwhile, the merger between Liberty Global and Virgin Media will create the world’s leading broadband communications company, covering 47 million homes and serving 25 million customers across 14 countries.
At present, Virgin Media, the second-biggest pay-TV provider in Britain, is behind Murdoch’s satellite group BSkyB.
The $23 billion deal would give Liberty entry to one of Europe’s biggest and most competitive telecom markets, allowing it to apply lessons learned as a pay-TV and broadband provider in 11 other European countries.