NEW YORK — Proving that he hasn’t let up on his dream of building a European cable TV empire, Liberty Media chief John Malone agreed Thursday to pay $731 million to acquire N.V. Casema, the Dutch cable arm of France Telecom.
The all-cash deal was a welcome success for the media baron, who had been stymied in recent attempts to gain a foothold in the beleaguered German and U.K. cable markets.
Casema — the third-largest cable operator in the Netherlands — will give Liberty a subscriber footprint of 1.5 million homes. Concentrated in major Dutch cities the Hague, Utrecht and Breda, the company’s fiber network carries voice and data traffic as well as cable TV.
Prudential Securities analyst Katherine Styponias said Thursday’s deal gives Liberty an added 21%-23% in market share on top of its 35%-40% in the Dutch cable market through ownership of European cable giant United Pan-Europe Communications.
“We believe Liberty will continue to pursue attractive investment returns by buying international cable assets at distressed prices,” Styponias said in a research note. “This should also allow Liberty to scale its existing European cable footprint and take advantage of economies of scale.”
Acquisition, which will be financed with a combination of cash on hand and bank financing, is expected to close in the fourth quarter. It’s still not clear, however, how Dutch regulators will react to the sale; analysts said they are increasingly wary of Liberty’s market dominance.
Liberty, which holds stakes in dozens of media and communications companies worldwide, has hit a few snags in its Euro operations over the past year.
UPC — by far the largest cable operator on the continent — is scrambling to restructure its a multibillion-dollar debt load, incurred during a buying spree over the past few years. And Malone’s plans to acquire cable assets from defunct German media giant Kirch Group and U.K. operator NTL hit roadblocks earlier this year.
Liberty shares fell 4% to $7.53 in Thursday’s trading. The stock has fallen steadily over the past 12 months, slipping from a high of $16.50 in summer 2001.