UPDATE 4-Liberty Global pays $3 bln cash for Unitymedia

* Europe's largest private-equity exit this year

* Deal values Unitymedia at 7.4 times 2010 EBITDA

* BC Partners makes 40 pct internal rate of return

* Liberty Global stock down 9 pct

(Adds share price, detail on ownership)

By Nicola Leske and Philipp Halstrick

FRANKFURT, Nov 13 (Reuters) - Liberty Global (LBTYA.O), the international cable operator controlled by John Malone, has agreed to buy Unitymedia from a private equity group for $3 billion in its first German acquisition.

The sale of Germany's second-biggest cable network by a shareholder group led by BC Partners [BCPRT.UL] and Apollo is worth $5.2 billion including assumed debt and marks the largest private equity exit in Europe this year.

The private equity group bought Unitymedia for 1.5 billion euros ($2.2 billion) in 2003.

BC owns about 35 percent of Unitymedia and Apollo owns 31 percent, with smaller stakes held by funds such as Och-Ziff Capital Management (OZM.N), a person familiar with the matter said. Company managers own about 6 percent.

Liberty Global shares were down 9.4 percent in New York at $20.93 by 1528 GMT as some analysts questioned whether there was enough future growth at the German company to justify the price.

Unitymedia [UNTMDA.UL], second behind Kabel Deutschland, has 4.5 million subscribers in a region covering 10 of the country's 20 biggest cities, including Cologne, Duesseldorf and Frankfurt.

Liberty Global was created from the combination of cable pioneer Malone's Liberty Media International and UnitedGlobalCom in 2005.

It operates in Austria, the Netherlands, Eastern Europe, Asia and Latin America and had until now avoided Germany because of regulatory complications. Unitymedia has taken some measures to simplify operations.

BC Partners and Apollo had been running a dual-track process in which they also considered an initial public offering. Liberty Global now plans to increase Unitymedia's debt to $3.7 billion and use part of the proceeds to fund the equity buy.

The remainder would be funded by a combination of existing liquidity, proceeds from the sale of $750 million in convertible notes and the sale of 6 million Series A and C shares to SPO Partners & Co for about $128 million, Liberty said.