Liberty Global strikes Ziggo deal

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.

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