Liberty Global closes Czech deal
EmptyBRUSSELS -- Liberty Global has completed its €322.5 million ($428.3 million) purchase of Czech cable operator Karneval Media, from Betbari Holding of the Netherlands, the company announced Wednesday.
At the same time, Liberty -- controlled by U.S. cable mogul John Malone -- confirmed the €184.5 million ($245 million) sale of its Belgian cable business, UPC Belgium, to Belgian cable and broadband operator Telenet.
The Karneval deal will see Liberty's Czech unit, UPC Ceska Republika, formally take over the country's No. 2 cable operator, giving the company more than 70% of the local cable market. However, UPC has agreed to give all remaining cable operators, largely smaller and regional Czech companies, fair access to programs for which either UPC or its parent have or will gain exclusive rights. Other concessions made by UPC include setting price caps through 2007 and limits on fee raises through 2010.
The Czech Liberty unit also agreed to maintain separate accounts for its cable and satellite services to demonstrate that there are no cross-subsidies between the two services.
Despite Telenet's purchase of UPC Belgium, Malone's company will still have a strong interest in the Belgian cable market as Liberty Global is Telenet's main shareholder with 28.1% of the shares.
Liberty Global, which holds three of the 16 seats on the Telenet board, is expected to raise its interest still further in the coming months. The company has two option packages -- one for 10 million shares (until mid-2007) and one for 8.5 million shares (through August 2009) -- but these have an exercise price of €25 ($32.90) per share.
Telenet, which floated on the Euronext Brussels stock market in October, has a total market capitalization value of about €2.1 billion ($2.5 billion). At the time, all Telenet shareholders sold part of their stakes for the IPO, except for Liberty Global, which bought more shares to add to its 21.4% stake.
Liberty Global is the world's leading international cable operator, serving about 13 million customers in 17 countries, principally located in Europe, Japan, Chile and Australia.