BERLIN — Sidelining what would have been one of Switzerland’s biggest initial public offerings in recent years, John Malone’s Liberty Global on Friday agreed to buy Cablecom for $2.2 billion one day after the cabler went public.
Liberty’s offer is lower than the planned IPO’s pricing range, which had valued the cabler as high as $2.7 billion.
Cablecom topper Bruno Claude said the company opted for Liberty’s offer because “the security of a cash transaction is better than an IPO, where many things can go wrong.”
The two companies had been in negotiations leading up to the IPO but failed to reach an agreement prior to Cablecom going public. Liberty reportedly came back with a higher offer after Cablecom announced terms for the IPO.
Liberty will acquire 100% of Cablecom from company shareholders, which include Apollo Management, TowerBrook Capital Partners, Goldman Sachs and several banks. Deal is expected to close in October.
Liberty Global prexy and CEO Mike Fries said, “Continued expansion of our footprint in Europe is a core strategic objective. Cablecom is a world class operation with over 2 million video, voice and data subscribers in one of Europe’s most attractive telecommunications markets. With 80% video penetration, limited satellite and data competition, and strong operating cash flow, Cablecom fits perfectly into our long-range growth plans.”
Fries added that the deal would make Liberty the largest broadband cable operator in 11 of its 14 European markets.
The takeover will be funded largely by debt, with Cablecom adding to its already heavy debt burden.
Cablecom is the biggest competitor to telco giant Swisscom.