Liberty Global’s business has “never been stronger” despite a recent slump in its share price, and the company could make significant acquisitions this year, according to president and CEO Mike Fries.
Interviewed at the Davos summit in Switzerland, Fries told Bloomberg that Liberty’s business “has never been stronger or healthier” and the company faces “more robust” growth prospects than ever of the next three years, he said.
He said he was “pretty relaxed” and saw more upside than downside. “We have to power through these uncertain times,” he said.
The European economy is in “pretty good shape” and LG is not seeing any fall off in consumer demand, said Fries. “Europe is in a pretty good place,” he said.
He said Liberty has prospects for further organic growth, with a further 10-12 million homes to be built out in Europe. “We see the next three years being more robust than the last three,” he said.
Fries admitted that there are a number of risk factors on the horizon, including the possibility of the UK, where it is the major cable player via Virgin Media, exiting the EU. He said that Brexit would create uncertainty and could potentially “make it harder for us to procure equipment and things of that nature”.
“We would be supportive of the UK staying in the EU. We will certainly be supportive of what the PM comes up with,” said Fries.
Fries said that Liberty’s share price had been hit by global uncertainty and possibly also to some extent over concern about its debt levels, which he said was unfounded.
“We are five times leveraged but our balance sheet is completely fixed rate for the longer term,” he said. “I’ve seen it all. We just power through, and we’re a big buyer of our own stock so this [volatility] creates opportunity too.”
Fries said the current market volatility could create other opportunities. He said Liberty Global is interested in the acquisition of mobile and other assets, although he declined to identify specific targets. He said it was “possible” this could be a big acquisition year for Liberty Global, with mobile assets high on the agenda.
Fries said there “is still cable to be consolidated”, with fragmentation of the industry still evident in some markets.
He was more cautious about further acquisitions in content. “We are being careful and selective,” he said, adding that deals such as its investment in Lionsgate showed that it is seeking windows into content, but in a cautious way. “I think we’re going to tread carefully in the content space,” said Fries.
On its stake in UK commercial broadcaster ITV, Fries said the pair had “a good strategic relationship” and that this could create opportunities such as gaining SVoD rights early and mutual opportunities in advertising. He said Liberty Global had so far not monetisied its big data and could do so in partnership with broadcasters like ITV.
Fries said regulators in Europe had “got it right” and could possibly provide lessons for US regulators, particularly around net neutrality.
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21st February 2019