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Liberty Global to focus on ‘core markets’ for further acquisitions

Liberty Global will focus on its “core operating markets” for any acquisitions or investments it makes from the proceeds of its sale of its German and central European assets to Vodafone and the forthcoming sale of UPC Switzerland to Sunrise, according to CEO Mike Fries.

Liberty Global CEO, Mike Fries

Speaking on the company’s latest quarterly earnings call, Fries said that Liberty was “more interested in buying, building and operating scale businesses in geographies and sectors we understand then spreading capital around”.

Fries said that Liberty would be “very, very selective” about making any investments outside of its core markets or core capital structure, and would not “buy something nonsensical”.

He said that the company would look at any opportunity “to solidify and grow the businesses that we already own and operate” and said that the company’s stock was currently undervalued, with zero or negative value attached to Virgin Media, “which is incredible to me”.

Fries admitted that the company had “a disappointing quarter on the subscriber front” and that there was “no other way to describe it”. He said that the UK market had “definitely slowed down a bit” but that Virgin Media would continue to focus on higher value customers rather than “chase after growth” at the low end of the market.

Referring to VodafoneZiggo, Liberty’s JV with Vodafone in the Netherlands, which performed well in the most recent quarter, Fries said that there was “little value” to talk about a change in structure currently but that Liberty was “very pleased with the business as it sits today”.

Referring to the Netherlands and Liberty’s other markets, he said: “We are invested in these markets. We have confidence in their prospects. And we’ll look to fortify or capitalize on our position, if and only if, attractive and compelling opportunities arise.”

Fries has in the past indicated that Liberty would at some point have to come to a decision about whether to buy out Vodafone or sell its stake in the venture.

Fries’ comments come as Liberty announced it would return cash to shareholders by buying back shares through  cash tender offers of up to US$2.5 billion (€2.2 billion).

Liberty Global is launching cash tender offers of up to US$625 million for its class A ordinary shares and up to US$1.875 billion for class C ordinary shares, to be purchased at a price range expected to be between US$25.25-US$29 for the class A shares and US$24.75-US$28.50 for the class C shares.

The company also promised further investment in Virgin Media. During the investor call, Fries said that there was “a huge opportunity to create value and demonstrate value in the UK” and said that the company would “be thoughtful about what the best allocation of capital is”.