Liberty Global in takeover talks with Dutch cable operator Ziggo

 
City A.M. Reporter
US CABLE group Liberty Global, which bought Virgin Media in a $15.8bn (£9.7bn) deal in February, is in takeover talks with Dutch operator Ziggo, its latest move to consolidate the sector in Europe with a deal analysts say could cost around €5bn.

Ziggo rejected an approach from the company controlled by US tycoon John Malone in October as too low, and said yesterday that no decision has yet been made about a full takeover offer.

Liberty makes more than 90 per cent of its revenue in Europe and has been driving consolidation of the fragmented market there, seeking to profit from rising and largely recession-proof demand for faster internet and digital television.

Liberty’s finance chief said last month that the company saw few remaining opportunities for another big deal in Europe and while it was still interested in taking over Ziggo it would only do so at the right price.

Ziggo did not say in October how much Liberty had offered to pay then. Shares in European cable companies trade on about nine times enterprise value to forecast earnings before, compared to about five times for telecom operators.

At 10.2 times, Ziggo’s multiple is below the 11.9 times value for Kabel Deutschland, which is now majority-owned by Vodafone