Malone’s Telenet Unit Plans to Return $1.3 Billion to Investors

Telenet Group Holding NV, the Belgian cable operator controlled by Liberty Global Inc., will return 950 million euros ($1.3 billion) to investors after shareholders blocked a plan by John Malone’s company to win full control of the unit.

Telenet plans a cash distribution of about 7.90 euros a share, or 900 million euros in total, and will buy back as much as 50 million euros of its own stock this year, the Mechelen, Belgium-based company said in a statement yesterday. Englewood, Colorado-based Liberty Global owns about 58 percent of Telenet.

While the distribution may assist Liberty Global in financing its $16 billion purchase of Virgin Media Inc. in the U.K., Telenet’s parent will have to share the funds with minority investors after a 35 euros-per-share bid for full ownership fell through last month. The Belgian cable operator had 906.3 million euros of cash and equivalents at year-end after raising 700 million euros in August to fund stock buybacks, prior to Liberty Global’s offer.

“This is an exception to our distribution policy of share buybacks,” Chief Financial Officer Renaat Berckmoes told reporters in Mechelen.

Telenet shares advanced 5.1 percent to 37.74 euros as of 9:02 a.m. in Brussels.

Telenet reiterated its Oct. 29 forecast that adjusted earnings before interest, taxes, depreciation and amortization will rise 7 percent to 8 percent this year, compared with 7.5 percent growth in 2012, as revenue will increase as much as 11 percent.

Earnings Growth

Adjusted Ebitda growth slowed to 3.3 percent in the fourth quarter, mostly because of marketing expenses which resulted in a record 180,700 net mobile client additions. Telenet also introduced subsidized rates for devices including Apple Inc.’s iPhone 5 during the quarter. Those subsidies drove up expenses by about 10 million euros, Berckmoes said.

Telenet more than doubled its market share to about 7 percent of mobile SIM cards in Belgium’s northern Flemish region last year, according to company estimates. The introduction of King and Kong rate plans in July, made possible by renegotiating an agreement to use Mobistar SA’s wireless network, pushed average mobile revenue per user above 30 euros a month in the fourth quarter.

Telenet plans to announce the details of the payment by March 22.

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