Liberty buys 12.7% Ziggo stake

Liberty Global has paid roughly €632.5 million (US$808.3 million) for a 12.65% stake in the Netherlands’ largest cable operator Ziggo.

Through the deal, Liberty has acquired 25.3 million Ziggo shares from Barclays Capital Securities for €25 per share, giving it an almost 13% stake based on the shares outstanding as of December 31, 2012.

Commenting this morning, Liberty said that the acquisition was an “attractive opportunity” to make a strategic investment in a market where it already has a strong presence through its UPC Netherlands subsidiary.

“The purchase price is also financially attractive given the stock’s approximate 7.4% dividend yield, which is implied by Ziggo’s expectation that it will pay €370 million of dividends during 2013,” the firm said.

The deal comes just days after Barclays inadvertently acquired a 14.2% stake in Ziggo after failing to find enough buyers for a block of shares it agreed to underwrite.

Private equity owners Cinven and Warburg Pincus moved last week to sell 40 million shares in the operator, the equivalent of a 20% stake. However, the share sale, which was completed on March 19, left Barclays as Ziggo’s biggest shareholder after it failed to find enough buyers. Barclays had guaranteed the sale at €25.05 a share last week.

Liberty is funding the acquisition with a non-recourse margin loan and existing liquidity, and does not require regulatory approval as it is taking a minority, not a controlling stake in Ziggo.

The deal is Liberty’s latest of the year, after the firm agreed a blockbuster US$23.3 billion (€17.9 billion) buyout of Virgin Media in February.