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Ziggo rejects Liberty Global bid for complete takeover

Dutch cable operator Ziggo has rejected a full takeover bid by John Malone’s Liberty Global group, describing it as inadequate. Liberty Global had prepared for the bid to buy Ziggo, the Netherlands’s largest pay TV provider, by stealth, increasing its stake to 28.5 percent after acquiring an initial 12.7 percent in March 2013.

Ziggo, which will be led by Deutsche Telekom’s Rene Obermann when he leaves the German Telco next year, has indicated there may not be an improved offer, with signs that it is determined to continue as an independent operator. But this comes at a time of unprecedented consolidation and merger activity in European cable TV, culminating in the recent acquisition by UK communications group Vodafone of Germany’s largest cable operator Kabel Deutschland for $7.7 billion, which recently gained regulatory approval from the European Union.

Earlier in 2013, Liberty Global itself made its largest acquisition to date in financial terms with the $23.3 billion purchase of Virgi

n Media, the UK’s largest cable operator with 3.7 million pay TV customers. Before then, Liberty Global had climbed to the No. 1 position in the fast expanding Germany pay TV market through two acquisitions, that of UnityMedia, then the country’s second largest cable operator, for $5.2 billion in November 2009, and then of Kabel BW for $4.5 billion in March 2011. The resulting company, called UnityMedia Kabel BW, has 6.7 million TV homes, well ahead of Sky Deutschland on 3.5 million, although the latter is growing faster and enjoys higher ARPU on the back of virtually global exclusive rights to live Bundesliga football matches.

In the Netherlands, Ziggo now has 2.8 million TV subscribers, having been formed early 2012 through the merger between former Dutch cable rivals Multikabel, Casema and Kabelcom. Liberty Global’s UPC Netherlands is second with 1.7 million TV subs, followed by Telco KPN with just over 1 million for its Digitenne IPTV service.