Liberty Global has announced an agreement to acquire Dutch cable company Ziggo in a stock and cash deal that is worth ?10 billion ($13.7 billion). Ziggo shareholders will receive ?11.00 in cash, 0.2282 Liberty Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary shares for each Ziggo share that they hold.
Based on Liberty Global’s Class A share price of $83.27 and Class C share price of $78.80 as of January 24, 2014, the offer indicates a price of around ?34.53 per Ziggo ordinary share. This is a 38% premium to the closing share price of Ziggo of ?25.85 on March 18, 2013. This is the day before the previous private equity shareholders executed an equity sale that preceded Liberty Global?s acquisition of its initial stake in Ziggo and a premium of 22% to the closing share price of Ziggo of ?29.24 on October 15, 2013. On October 14, Ziggo announced that they received a preliminary proposal regarding a potential offer for the company by Liberty Global. Ziggo agreed not to pay or declare any dividend until completion of the transaction.
The combined company will reach over 10 million (90% of Dutch homes) people in the Netherlands. The combined company has around ?2.5 billion in total revenues. The Dutch operations will be centralized at Ziggo?s Utrecht headquarters.
?This transaction creates a nationwide cable champion that will drive investment and innovation for the benefit of Dutch consumers and businesses alike. Our combined operations will reach over 90% of all Dutch households allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands, and at the same time generate significant revenue and operating efficiencies. 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,” stated Liberty Global CEO Mike Fries.