Malone’s Liberty Global Said Approaching Deal to Buy Ziggo

Jan 06, 2014 11:46 am ET

(Updates with closing share price in third paragraph.)

Jan. 6 (Bloomberg) -- Liberty Global Plc is putting the final touches on an acquisition of Dutch broadband provider Ziggo NV as the cable company expands its European operations, according to people with knowledge of the matter.

Liberty Global, controlled by U.S. billionaire John Malone, and Ziggo aim to announce a friendly deal as early as the middle of this month, and are hammering out a final acquisition price and other terms, the people said, asking not to be identified discussing private negotiations.

Ziggo’s shares rose 3.6 percent in Amsterdam to 33.77 euros, valuing the company at about 6.75 billion euros ($9.2 billion).

Outstanding issues include determining whether Ziggo Chief Executive Officer Rene Obermann, a former CEO of Deutsche Telekom AG who started this month, will stay at the Dutch company if it is bought by Liberty, the people said. Liberty Global already owns about 30 percent of Ziggo, which it has gradually amassed. The companies are also discussing how to protect jobs once Ziggo’s operations are combined with Liberty Global’s existing Dutch unit, UPC, the people said.

Malone, with a net worth of about $7.3 billion according to the Bloomberg Billionaires index, has built a European cable and broadband empire through acquisitions in countries including the U.K. and Germany, taking advantage of rising demand for high- speed Internet and pay TV.

Liberty Global last year bought Virgin Media Inc., a U.K. pay-TV provider, for about $16 billion, putting it in head-to- head competition with Rupert Murdoch’s British Sky Broadcasting Plc.

Ziggo’s stock may be worth 37 euros in a deal, Matthijs van Leijenhorst, an analyst at Kepler Cheuvreux in Amsterdam said on Dec. 12, meaning Malone would have to offer about 5.3 billion euros for the shares Liberty Global doesn’t already own.

Ziggo spokesman Martijn Jonker declined to comment on talks with Liberty Global and referred queries to a December press release the company issued that confirmed the negotiations.

Liberty Global spokesman Marcus Smith also declined to comment on the matter.

--With assistance from Kristen Schweizer in London. Editors: Mark Beech, Robert Valpuesta