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Market Update

Liberty Global and Virgin Media in $16 Billion Deal

Author: Barry Randall
Last Update: 9:47 AM ET February 06 2013

Liberty Global Inc agreed to acquire U.K. cable television services provider Virgin Media Inc for $16 billion in cash and stock. Including the debt, the deal is valued at $23.3 billion.

The deal between the two companies values second largest cable operator at $47.87 a share, or 24% premium to February 4 closing price.

The statements released by the companies noted Liberty agreed to pay 8.8 times 2012 operating cash flow of Virgin Media and 7 times 2013 projected cash flow. Virgin Media shareholders will control 36% of combined company and 26% of voting rights.

Liberty Global will assume more debt to fund $5.9 billion of cash and increase debt of Virgin Media by $3 billion.

After the deal, Englewood, Colorado based Liberty will service 20 million customers with Internet, phone and pay-TV service and more than 18 million are located in Germany, France, UK and Belgium.

Virgin Media has about 4.9 million customers and is the second largest in the UK cable market following BSkyBís 10.7 million. Virgin was created after the merger between Telewest and NTL and mobile telecom operator Virgin Media in 2006.

Richard Branson controls 3% of the Virgin Media and the company has been at odds with BSkyB and focused on offering high speed Internet access which Liberty is expected expand.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc