Liberty Global To Buy Ziggo In $13.7 Bln Deal; To Buy Back Addl. $1 Bln In Stock

(RTTNews) - U.S. cable group Liberty Global Plc (LBTYA, LBTYB, LBTYK), which currently holds 28.5 percent stake in Dutch broadband provider Ziggo NV (ZIGGY.PK, ZIGGF.PK), Monday said it has agreed to acquire the remaining stake in a stock and cash deal that values Ziggo at about 10 billion euros or about $13.7 billion. The total consideration for the remaining 143.1 million shares is approximately 4.9 billion euros or $6.8 billion.

Separately, Liberty Global, controlled by billionaire John Malone, announced that its Board of Directors has approved the authorization of a $1.0 billion increase to its two-year $3.5 billion stock repurchase program, bringing its total program to $4.5 billion. The Board has also extended its intention to complete the program from mid-2015 to year-end 2015.

Liberty Global's Board of Directors also has approved a stock dividend of one Liberty Global Class C ordinary share on each outstanding Class A, Class B and Class C ordinary share as of the record date for the stock dividend, to be issued on March 3.

Under the recommended offer terms to Ziggo, and adjusting for the stock dividend, each Ziggo shareholder will receive 11 euros in cash, 0.2282 Liberty Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary shares. The offer implies a price of approximately 34.53 euros per Ziggo ordinary share, based on Liberty Global's share price as of Friday.

The offer price represents an implied equity value of approximately 6.9 billion euros or $9.5 billion and an implied total enterprise value of approximately 10 billion euros or $13.7 billion, including Ziggo's net debt of 3.1 billion euros.

Of the total consideration for the remaining stake, the stock component equates to 3.4 billion euros or $4.6 billion and the cash component equates to 1.6 billion euros or $2.2 billion.

The offer represents a 38 percent premium to Ziggo's share price on March 18, the day before the previous private equity shareholders executed an equity sale that preceded Liberty Global's acquisition of its initial investment in Ziggo. The offer also represents a premium of 22 percent to Ziggo's share price on October 15, the day before Ziggo announced the receipt of Liberty Global's preliminary proposal.

Ziggo has also agreed not to pay or declare any dividend or to make any distribution in kind until completion of the transaction.

The offer, which has been unanimously recommended by Ziggo's Supervisory and Management Boards, would close in the second half of 2014.

Liberty Global expects the combined business to reach 7 million or over 90 percent of Dutch homes, and provide approximately 10 million video, broadband internet and telephony services to over 4 million unique customers through a fiber-rich cable network. The combined business will have approximately 2.5 billion euros in total revenue.

Mike Fries, chief executive officer of Liberty Global, said, "We are targeting €160 million in annual run-rate synergies by 2018, which will underpin our growth profile over the next few years in the Netherlands and for Liberty Global overall, as we continue to build scale in Western Europe."

Liberty Global shares closed Friday's trading at $83.27, down $2.26 or 2.64 percent.

In Amsterdam, Ziggo shares are currently trading at 32.25 euros, down 1 euros or 3.01 percent.