UPDATE 3-Liberty Global makes bid approach for cable firm Ziggo
BRUSSELS Oct 16 (Reuters) - U.S. cable group Liberty Global has made an approach to buy Dutch firm Ziggo , as it leads a charge to consolidate the sector in Europe.
Ziggo, which has a market value of 6.3 billion euros ($8.51 billion), on Wednesday said it had rejected the potential offer from its largest shareholder as inadequate.
It did not disclose how much Liberty Global, controlled by U.S. tycoon John Malone, had offered to pay for the rest of the company. Liberty already holds 28.5 percent of Ziggo, a provider of TV, internet and telephone services.
Liberty, which owns Germany's second-largest cable operator UnityMedia, bought Britain's Virgin Media in a stock-and-cash deal worth about $15.8 billion in February.
It also bid for Germany's largest cable group Kabel Deutschland, although dropped out after a 7.7 billion euro rival offer from Britain's Vodafone.
German weekly Manager Magazin said earlier on Wednesday that Liberty intended to merge Ziggo with its existing UPC operations in the Netherlands and Belgian firm Telenet in which it already has a majority stake. That would give Liberty a much larger connected network serving Dutch speakers in both countries.
At current market prices, Liberty would have to pay at least 4.5 billion euros to buy the whole of the Dutch group - a deal that could further stretch its balance sheet.
At the end of June, Liberty had total debt of $41.9 billion. According to Thomson Reuters data, its net debt was 8.0 times core profit over the past 12 months, above a peer median of 2.1.
Ziggo, which is due to report third-quarter earnings on Friday, said there was no certainty that Liberty Global would make a revised offer.
Liberty was not immediately available for comment. Last week Chief Executive Mike Fries told Reuters that he was content with the group's strategic stake in Ziggo.
Ziggo's shares rose as much as 7.7 percent after Manager Magazin's article was published, then hit 32.18 euros, a gain of 10.1 percent after Ziggo's own statement.
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