Telenet buys UPC Belgium for $246 mil
EmptyBRUSSELS -- Belgian cable and broadband operator Telenet has agreed to purchase UPC Belgium from Liberty Global for €187 million ($246 million) in cash. UPC Belgium is Liberty's Belgian cable provider and Telenet's main rival with 125,000 subscribers.
Liberty Global -- controlled by U.S. cable mogul John Malone -- is Telenet's main shareholder with 28.07% of the shares.
Earlier this month, Liberty Global exercised options to buy 6.75 million new Telenet shares at a cost of $173.6 million. Liberty Global is the largest owner of cable-television systems outside the U.S.
Liberty Global, which holds three of the 16 seats on the Telenet board, is expected to raise its interest still further in the coming months. The company has two option packages -- one for 10 million shares (until mid-2007) and one for 8.5 million shares (through August 2009) -- but these have an exercise price of €25 per share.
Telenet, which floated on the Euronext Brussels stock market in October, has a total market capitalization valued at about €2.1 billion ($ 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.
Telenet this week announced a third-quarter net profit of €4.6 million ($6.1 million) compared with a €7.3 million loss for the same time last year, on sales of €203 million ($268.7 million) against €185.4 million.
Based in the town of Mechelen, north of Brussels, Telenet employs 1,600 people and provides cable TV, Internet and telephone services to some 2.6 million customers. It provides its cable services through networks of 16 local municipal cable operators. The company, which offers access to the Internet and phone services, rolled out a digital television service last year, challenging Belgium's dominant telephone company Belgacom.