Moody’s said that the acquisition made strategic sense for Liberty Global but that the move was nevertheless “credit negative, given that it uses incremental debt capacity and signals Liberty Global’s undiminished acquisition appetite only a few weeks after the company announced the acquisition of Virgin Media…for US$23.3 billion (€18.1 billion) in shares and cash, its largest acquisition to date”.
Moody’s said that the Virgin Media acquisition presented “a major integration and corporate reorganization task for the company”. While it said it had no immediate plans to downgrade Liberty Global’s Ba3 rating, its ongoing review of the company’s credit rating would now include an evaluation of Liberty Global’s further plans for the Dutch cabler, “given that we would expect the company to explore a full take-over of Ziggo over time”.
Moody’s said that Ziggo’s own rating would remain unchanged for now but that the prospect of Liberty Global, with its “more aggressive financial policy”, increasing its stake over time added an element of uncertainty to the outlook.
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12th December 2018