Liberty Global buying Virgin Media
BY BREE FOWLER Associated Press
Thursday, February 07, 2013
2/07/13 at 4:04 AM
NEW YORK - Liberty Global Inc., the cable TV operator controlled by media mogul John Malone, is buying U.K.-based Virgin Media Inc. in a $16 billion deal that steps up the rivalry between Malone and fellow billionaire Rupert Murdoch.
Liberty Global is paying $5.9 billion in cash and the rest in stock for Virgin Media. The combination, announced late Tuesday, will provide stiffer competition in the U.K. to satellite TV provider BSkyB, in which Murdoch's News Corp. owns a 40 percent stake. The combined company will become one of the world's largest providers of cable TV, Internet and phone services, with 25 million customers in 14 countries.
"Liberty Global together with Virgin Media is a powerful combination," Liberty Global President and CEO Michael Fries said Wednesday on a conference call with investors. "In fact, it hits the mark on just about every strategic and operating criteria we have established for our company."
Liberty Global is the largest cable operator in most of its 11 European markets. Virgin Media is the second-biggest pay TV company in the U.K. after BSkyB.
Besides the cable TV, Internet and landline phone operations, Virgin Media runs a mobile phone business. That's a business Liberty Global doesn't currently have. Virgin Group boss Richard Branson - a multibillionaire, like Malone and Murdoch - has a minority stake in Virgin Media.
The companies said the transaction is equal to $47.87 per Virgin Media share. That's about a 24 percent premium on the closing price of Virgin Media's U.S.-traded stock on Monday.
Virgin Media's U.S. shares fell 72 cents, or 1.6 percent, to close at $44.89 on Wednesday, a day after surging almost 18 percent to close at $45.61 after the company acknowledged it was in acquisition talks with Liberty Global. Liberty Global's stock fell $1.82, or 2.7 percent, to $66.06.
Original Print Headline: U.K.'s Virgin Media sold to U.S. cable company