Liberty Media to Acquire Unity Media

123jump.com Staff
13 Nov, 2009
New York City

Liberty Media acquires Unitymedia for

[R]2:15 PM New York – Liberty Media acquires Unitymedia for €3.5 billion. John Malone controlled cable and media group will raise 2.5 billion in debt to pay for the acquisition.[/R]

Liberty Global, Inc ((LBTYA)) fell 9.2% or $2.13 to $20.97 after the cable media content company agreed to acquire Unitymedia for an equity purchase price of €2.0 billion ($3.0 billion), from its parent, which is owned by a group of private equity shareholders led by BC Partners and Apollo Management.

Liberty will also assume debt of €1.5 billion as well. Liberty will pay 2.5 billion by assuming new debt and the rest from its cash reserves.

Unity Media was scheduled to announce a plan to list the company in Germany but negotiations with John Malone controlled Liberty gather momentum in the last few weeks. The company was planning to raise between €450 million and €500 million.

London based BC Partners and New York based Apollo acquired the German cable operator for €1.5 billion in 2003.

Malone attempted to acquire the entire cable network in Germany in 2003 but was rejected by the federal antitrust regulators.

Unity Media network covers only two sixteen states of Hesse and North Rhine-Westphalia with households of 11 million and 24 million people.

Malone is hoping that he can convince more Germans to buy enhanced TV channel package. Currently only 4.6 million or less than 12% of Unity Media customers subscribe to enhanced package. Basic package costs only €10 a month.

Liberty Media noted in statement that acquisition cost is 7.4 times adjusted earnings before interest and depreciation.