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Activist investor takes aim at Telenet

Activist investor Lucerne Investment Partners has threatened legal action against Liberty Global-backed Belgian cable operator Telenet over the latter’s governance and what it sees as the overweening influence of Liberty Global.

Lucerne, which holds a stake of just under 3% in the operator, has reportedly given Telenet a week to provide answers before it goes to court.

Lucerne has claimed that Telenet’s board is not independent and that the company is effectively controlled by Liberty Global management, even though Liberty Global CEO Mike Fries has no position in Telenet. Liberty holds a majority stake of 58% in Telenet.

The hedge fund has complained that the six Liberty Global members of Telenet’s nine-strong board dominate decision-taking and that the company’s governance fails to meet regulatory standards.

Practical reasons for Lucerne’s discontent include Telenet’s decision to pursue the acquisition of Wallonian cable operator Voo, rather than return additional cash to shareholders in the form of a dividend or share buybacks.