By Dow Jones Business News, October 16, 2013, 02:15:00 PM EDT
AMSTERDAM--John Malone's international cable business, Liberty Global Inc. ( LBTYA ) has made a new attempt to bolster
its footprint in Europe, in the latest consolidation move in the region's telecom sector.
Dutch cable company Ziggo NV (ZIGGO. AE) said Wednesday that Liberty Global, which already holds a 28.5% stake in the
company, made an offer for the shares it doesn't already own. Ziggo, which has a market capitalization of around 6.24
billion euros ($8.424 billion), said it rejected the offer.
"The potential offer was considered inadequate and there is no certainty that Ziggo will receive any revised offer,"
Ziggo said, without giving more details about the bid. "Further announcements will be made if and when relevant."
In Amsterdam, shares in Ziggo closed 6.7% higher following the announcement. Liberty Global didn't immediately respond
to a request for comment.
Englewood, Colo.-based Liberty Global, led by media mogul Mr. Malone, has been on a spending spree in recent years and
owns broadband networks in a dozen European countries. It operates separately from Mr. Malone's U.S.-focused content
business Liberty Media Corp.
The expansion plan comes as Europe's fragmented telecom industry is expected to undergo a consolidation wave as it
wrestles with structural challenges and a weak economy.
"The desire to consolidate appears to have increased," Goldman Sachs said in a report on the European telecom sector
published Wednesday. "We see a very strong likelihood that the average four-player European market will consolidate in
the next five years."
The Netherlands looks set to become an important testing ground for the consolidation trend. The country's largest
telecom operator, Royal KPN NV, has agreed to sell its German mobile business to a unit of Telefonica SA of Spain. KPN,
meanwhile, had been in talks to be fully acquired by America Movil SAB, controlled by Mexican billionaire Carlos Slim.
However, Movil said Wednesday that it is withdrawing its offer for the rest of KPN, as a foundation's decision to take
an almost-50% stake in the company makes the offer not viable.
Liberty Global has been one of the most active deal makers this year.
It acquired U.K. cable-television and Internet provider Virgin Media for $16 billion and raised its stake in Belgium'sTelenet Group Holding NV.
It also expressed an interest in buying Germany's biggest cable operator, Kabel Deutschland Holding AG, before it was
acquired by Vodafone Group PLC.
Some analysts expected Liberty Global to make a move for Ziggo, especially after it acquired a first stake in the
company in March. Liberty Global already has a presence in the Netherlands through its UPC subsidiary.
Analysts say a combination of Ziggo and UPC would make strategic sense and create a stronger domestic rival for KPN.
The combined entity could also be merged with Telenet, even though Liberty Global has yet to take full control of the
Ziggo was listed on the Amsterdam stock exchange in 2012 by its then-owners, private-equity firms Cinven and Warburg
Pincus. It serves around 3 million households and has 1.8 million broadband clients, 2.2 million digital-television
customers and 1.4 million telephone subscribers, according to its website.
Ziggo reported net profit of EUR193 million in 2012 on sales of EUR1.54 billion. The company will report third-quarter
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