* Liberty makes another attempt to buy Ziggo
* Analysts value deal at around 5 billion euros
* Ziggo rejected previous approach as too low in Oct
* Ziggo shares hit all-time high
By Robert-Jan Bartunek
BRUSSELS, Dec 12 U.S. cable group Liberty Global
is in takeover talks with Dutch operator Ziggo
, its latest move to consolidate the sector in Europe
with a deal analysts say could cost around 5 billion euros ($6.9
Ziggo, which rejected an approach from the company
controlled by U.S. tycoon John Malone in October as too low, on
Thursday said no decision has yet been made about a full
Liberty, which makes more than 90 percent of its revenue in
Europe, has been driving consolidation of the fragmented market
there seeking to profit from rising and largely recession-proof
demand for faster Internet and digital television.
The U.S. company has built its leading position in a broad
stretch of Europe from Ireland to Romania via acquisitions over
the past decade, and already owns 28.5 percent of Ziggo.
Buying the rest would increase Liberty's presence in the Low
Countries, where it owns Ziggo's Dutch competitor UPC, as well
as a majority stake in Belgian group Telenet, the main
cable group in the north of Belgium.
Liberty, which also owns Germany's second-largest cable
operator UnityMedia and bought Britain's Virgin Media in a $15.8
billion deal in February, declined to comment on Thursday.
Its finance chief said last month the company saw few
remaining opportunities for another big deal in Europe and while
it was still interested in taking over Ziggo it would only do so
at the right price.
Ziggo's shares, which were listed in March 2012 when private
equity groups Warburg Pincus and Cinven took the group to the
Amsterdam bourse, have benefited from the takeover speculation,
rising 10 percent to an all-time high of 33.98 euros on
Thursday. It pared gains to trade 5.9 percent higher at 1459
ABN AMRO analyst Marc Hesselink said Liberty could bid as
much as 37 euros per share, based on a value of 32 euros for
Ziggo and 5 euros of cost gains from combining the networks of
Ziggo and UPC.
That would value Ziggo, which from January will be headed by
former Deutsche Telekom boss Rene Obermann, at 7.4
billion euros, and the share Liberty does not already own at 5.3
Analysts at Bernstein said Liberty could bid up to 35 euros,
implying the cost to Liberty of 5 billion euros.
Ziggo did not say in October how much Liberty had offered to
Shares in European cable companies trade on about nine times
enterprise value to forecast EBITDA, according to Thomson
Reuters data, which compares with about five times for telecom
At 10.2 times, Ziggo's multiple is below the 11.9 times
value for Kabel Deutschland, which is now
majority-owned by Vodafone. Liberty paid about eight
times forward EBITDA for Virgin Media.
At a price of 35 euros per Ziggo share, the multiple would
be about 11 times.
Investors have shown a strong appetite for European cable
companies because of their promise of superior growth and merger
prospects. Cable firms have attracted the interest of mobile
companies like Vodafone, as all-inclusive bundles of television,
Internet, mobile and fixed-line telephone services gain in
popularity with consumers.
The share price for France's Numericable has risen
by about 11 percent since its market debut a month ago.
While Liberty has been a consolidator in Europe, it also has
a reputation for resisting pressure to pay what it considers to
be too much for its targets.
In January it halted a bid to take full control of Telenet
after increasing its stake to 58.3 percent from 50.4 percent,
refusing to pay more even though an independent advisor and
large shareholder had said the offer was too low.
It also walked away from Kabel Deutschland, when Vodafone
boosted its bid to 7.7 billion euros ($10.62 billion) for full
UBS analyst Polo Tang wrote in a note to clients that
Liberty might be content with a majority stake below 100
percent, with a Ziggo-UPC combination still listed.