This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Liberty Global strikes Ziggo deal

Stocks in this article: LBTYA

NEW YORK (The Deal) -- Acquisitive cable company Liberty Global (LBTYA) on Monday, Jan. 27, announced an agreement to buy the outstanding shares in Dutch cable company Ziggo in a deal with an enterprise value of 10 billion euros ($13.7 billion).

Liberty, of Englewood, Colo., said it would offer Class A and Class C shares, as well as 11 per share in cash, to buy the 71.5% of the Dutch cable company it doesn't already own. The bid is worth 34.53 euros per Ziggo share, a 4% premium to the company's Friday close and 12% higher than Ziggo's close on Dec. 11, the day before it revealed the latest round of talks.

It values the target's total equity at 6.9 billion euros.

"Our combined operations will reach over 90% of all Dutch households allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands, and at the same time generate significant revenue and operating efficiencies," said Liberty CEO Mike Fries in a statement.

Ziggo and Liberty reopened talks in December after earlier negotiations led to a stalemate over price. Like rivals, Liberty is spending to expand its geographic reach and win new customers to sell Internet, phone and entertainment services -- it already runs the UPC Holding cable company in the Netherlands.

The deal will mean a pink slip for new Ziggo CEO Rene Obermann, who left the leading role at Deutsche Telekom to take up the helm at Ziggo on Jan. 1. He will step down once the deal closes in the second half. Ziggo's Utrecht headquarters will become Liberty's Dutch base.

Both Ziggo boards are recommending the offer to shareholders.

Ziggo shares slipped 3.4%, or 1.12 euros, to trade at 32.12 by early afternoon in Amsterdam as investors uninterested in owning Liberty's U.S.-listed shares bailed. The shares have gained about 48% in the last year, in large part because of takeover speculation.

Liberty, whose chairman is cable financier John Malone, first showed its interest in Ziggo by buying 28.5% last year after it was listed by previous owners Warburg Pincus LLC and Cinven Ltd.

Last year Liberty spent $23.3 billion buying the U.K.'s Virgin Media and 3.16 billion euros on German regional cable operator Kabel BW.

Despite the spending, Liberty Monday said it would also extend a share buyback by $1 billion. It's already pledged to spend $3.5 billion repurchasing its stock -- part of a total $10 billion since 2005, according to Liberty.

Liberty took financial advice from Bank of America Merrill Lynch and Morgan Stanley, with Allen & Overy LLP handling legal details. Ziggo took financial advice from JPMorgan Chase & Co. and Perella Weinberg Partners LP's Philip Yates. Freshfields Bruckhaus Deringer LLP provided counsel.

ABN Amro Group NV and attorneys from Stibbe acted as advisers to Ziggo's supervisory board.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,477.26 +77.59 0.47%
S&P 500 1,922.61 +18.60 0.98%
NASDAQ 4,367.7660 +51.6920 1.20%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs