Ziggo Turns Down Liberty Global’s Takeover Bid as Too Low

Ziggo NV, the Dutch cable-television provider, rejected a takeover proposal from shareholder Liberty Global Plc in a setback for billionaire John Malone’s European expansion plan.

Calling Liberty Global’s preliminary offer “inadequate,” Ziggo said yesterday in a statement it’s uncertain whether it will receive any improved bid. The offer was made in August, Liberty Global said in a company filing. Germany’s Manager Magazin reported yesterday that Liberty Global was seeking to buy the rest of the cable company, prompting the disclosures.

Ziggo jumped 6.7 percent yesterday in Amsterdam to 31.20 euros for its biggest gain in more than six months. The company has a market value of 6.2 billion euros ($8.4 billion). Liberty Global held a 28.5 percent stake in the Utrecht-based company as of July 25, data compiled by Bloomberg showed.

Liberty Global is extending its reach in Europe, acquiring the U.K.’s Virgin Media Inc. for about $16 billion this year. Liberty Global had also attempted to buy Kabel Deutschland Holding AG, a German cable company, before being outbid by Vodafone Group Plc.

Justin Dini, a Liberty Global spokesman, declined to comment beyond Liberty’s filing. The stock was little changed at $76.88 in New York.

Largest Operator

Today, Ziggo fell 1.7 percent to 30.66 euros at 12:08 p.m. in Amsterdam.

Ziggo, which will be led by Deutsche Telekom AG’s Rene Obermann when he leaves the German carrier next year, started trading in March 2012. The product of a merger of Dutch cable rivals Multikabel, Casema and Kabelcom, Ziggo is now the largest operator in the Netherlands. Ziggo has 2.8 million digital-TV subscribers to Royal KPN NV’s 1.8 million, according their websites.

Liberty Global bought a 12.7 percent holding in Ziggo from Barclays Plc in March for 25 euros a share. It boosted the stake to 28.5 percent in July. Liberty Global already operates in the Netherlands through its UPC Broadband Holding BV unit.

Liberty Global Chief Executive Officer Mike Fries said last week the company was “happy” with its current ownership stake and that “the position we have now is strategic.” He declined to say if or when Liberty Global would add to its stake.

Ziggo’s share price divided by adjusted earnings per share, a measure of how expensive a stock is, is 19.4, according to data compiled by Bloomberg using trailing 12-month numbers. That compares to an industry average of 17.3.

Also yesterday, billionaire Carlos Slim’s America Movil SAB said it withdrew a 7.2 billion-euro offer for shares of Royal KPN NV after talks broke down with the biggest Dutch phone carrier.

(Updates with share trading in sixth paragraph.)
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