Liberty Global Inc, the largest broadband cable operator in the US, is to make its second financial transaction in the space of a week with the news that it plans to increase its holding in Telenet Group Holding NV, the largest broadband cable operator in Belgium.
In connection with the initial public offering of Telenet, which is expected to close on October 14, Liberty Global has agreed to purchase, through a wholly owned subsidiary, 7,722,918 shares in Telenet for an aggregate cash purchase price of approximately 160m euros ($191m).
As a result of the purchases, a partnership majority owned and controlled by Liberty Global will increase its stake in Telenet from 14% to just under 20%, but will continue to exercise voting control over a total of 21.3% of the Telenet shares. The partnership also holds call options to acquire an additional 25,418,826 shares in Telenet, or approximately 25% of the total shares.
Meanwhile, there were reports that Belgium’s financial regulator is looking into the buy-and-sell orders for the Belgian cable company, after its shares fell almost 10% during its first trading day. Apparently, more than 10% of Telenet’s outstanding capital changed hands on October 11, 2005.
The Belgian banking, finance and insurance commission is asking Euronext Brussels and the banks for access to the details of Telenet buy and sell orders, according to the Belgian financial daily De Tijd.
The move for Telenet comes days after Denver, Colorado-based Liberty Global agreed to buy Cablecom Holding AG, the Swiss cable-television and internet access provider, for approximately for $2.2bn, making Liberty Global the largest broadband cable systems owner in 11 of its 14 European markets.
At that time, CEO and president of Liberty Global, Mike Fries, told the markets that continued expansion of our footprint in Europe is a core strategic objective.
Liberty Global owns cable operations in Europe, Japan, and Latin America, and has recently filed with regulators to sell periodically up to $2bn in debt, preferred and common stock, and other securities. The company said in a registration statement with the US Securities and Exchange Commission that it would use the proceeds from the offering for general corporate purposes.
Only recently, UK cable giant NTL Inc finally announced that it was buying Telewest Global Inc for $6bn in a deal that will create the UK’s second largest communications company with combined revenues of 3.4bn pounds ($5.9bn).