Liberty offers Euro cable giant new merger pact

John Malone’s Liberty Media said Tuesday it plans to loan giant cabler United Pan-Europe Communications 1 billion euro (about $850 million) as part of a modified merger agreement with UPC’s parent, UnitedGlobalCom.

UPC had planned to raise the cash with a rights offering, which it canceled.

Malone also said his Denver-based holding company is continuing to talk with Deutsche Telekom to buy six regional cable networks. That deal, put together by Liberty and private equity partner Klesch & Co., was announced months ago, but the two sides have been haggling over price.

“Liberty continues to renegotiate,” Malone said during a conference call to discuss the UnitedGlobalCom agreement. “… We certainly anticipate completing the transaction, but it isn’t done yet.”

UnitedGlobalCom, which operates in 26 countries, is a key investment for Liberty as it expands Liberty’s budding overseas cable empire. UPC, Europe’s largest cable company, is the jewel in UnitedGlobal’s crown, and the Deutsche Telekom properties would be another important cornerstone for Liberty.

“Europe should generate a U.S.-style cable industry rather than separate regional networks,” Malone said. “There is currently no platform that has meaningful scale across German-speaking Europe.” He added that if Liberty gets its way in Germany, it would most likely invest in UPC’s Internet service provider, Chello.

At the end of March, UnitedGlobalCom services reached nearly 19 million homes and served about 11 million video customers. Besides 53% of UPC, it owns 81% of Austar United Communications in Australia and New Zealand and all of Chile’s VTR GlobalCom.

Separately, Deutsche Telekom is said to be in talks with EchoStar to help the U.S. satellite provider in its bid for Hughes Electronics.

EchoStar topper Charlie Ergen is also looking to two U.S. telecom companies, SBC Communications and BellSouth Corp. for cash. Any offer he makes will be up against Rupert Murdoch’s News Corp., which badly wants to merge Hughes Electronics’ satcaster DirecTV with its worldwide satellite platform Sky Global Network.

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