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John Malone's Liberty Global Raises Stake in Largest Dutch Cable Operator Ziggo

John Malone Sun Valley 2012 - P 2013
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John Malone

The international cable giant now owns 28.5 percent of the company after first taking a stake earlier this year.

LONDON – John Malone's Liberty Global has further increased its stake in Ziggo, the largest Dutch cable operator.

Malone's international cable company has acquired an additional 17.5 million shares, bringing its overall stake to 28.5 percent.

In March, Liberty Global paid $810 million for a 12.65 percent stake in Ziggo. In late April, its stake increased to 15 percent and had since risen to 18.2 percent before the acquisition. 

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Financial details of the latest deal weren't disclosed. "The purchase price for the original stake was €25 ($33.22)," said UBS analyst Polo Tang. "It is unclear what price Liberty Global paid for the new stake -- current share price is €27.90 ($37.07)."

He added: "The news is positive for investor sentiment on Ziggo and fuels hopes of a full takeover." Based on Dutch merger and acquisition rules, Liberty Global would have to make a mandatory offer for all of Ziggo once its stake reaches 30 percent, according to the analyst.

Nonetheless, the latest move "could still trigger a merger investigation by the competition authorities" if they deem Liberty Global has significant influence over Ziggo, Tang suggested.

"Ultimately, we believe Liberty Global will seek to merge its UPC unit with Ziggo to create a national Dutch cable operator," he concluded.

Private equity firms Cinven and Warburg Pincus own most of Ziggo.

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Tang said Liberty Global's continued increase of its Ziggo stake could be a defensive move to strengthen its Dutch cable operations amid competition. But the Malone company also "may see upside in Ziggo from mobile with Ziggo set to launch a new service later this year," he said.

Also, Malone's UPC Netherlands operates in parts of the country that don't have overlap with Ziggo's operating regions.

In its biggest deal ever, Liberty Global, which operates mostly across European countries, earlier this year acquired U.K. cable giant Virgin Media, giving it more pay TV subscribers than U.S industry leader Comcast Corp.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai