The stock and cash deal will see Liberty offer roughly €34.53 per Ziggo share, based on its own current share price. This marks a premium of 22% on Ziggo’s closing share price of €29.24 on October 15, 2013 – the day before Ziggo first announced it had received a preliminary takeover proposal from Liberty.
The deal combines two regional networks – Ziggo and Liberty Global’s UPC Netherlands – with Ziggo to become the brand for Liberty’s Dutch business.
Liberty, which bought a preliminary 28.5% stake in Ziggo last year, said that the combined business would reach 7 million Dutch homes and will provide some 10 million video, broadband internet and telephony services to more than 4 million customers through a “fiber-rich cable network.”
“This transaction creates a nationwide cable champion that will drive investment and innovation for the benefit of Dutch consumers and businesses alike,” said Liberty Global CEO Mike Fries.
“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.”
Strategically, the firms said that the combination of their businesses would enhance their ability to invest in “cutting edge products and services” and create a leading challenger in the mobile and enterprise businesses.
The combined company will be based in Ziggo’s Utrecht headquarters.
The deal was unanimously recommended by Ziggo’s supervisory and management boards and is expected to close in the second half of 2014.
At the same time, Liberty announced today that its board of directors has approved a US$1.0 billion increase to its two-year US$3.5 billion stock repurchase program, bringing its total program to $4.5 billion.
Ziggo has made an exchange offer of up to €934 million of its outstanding €1,208,850,000 senior notes due in 2018 for an equal aount of new 8% senior notes. Ziggo has also launched a cash offer for its outstanding €750 million 3.625% notes due in 2020, and has said it will redeem or retire any and all of its oustanding €150 million 2017 notes.