Malone bid may face fight

Liberty talking to Callahan about buying its 21.6% stake

BRUSSELS — Opposition from Flemish investors could throw a monkey wrench into the works of John Malone’s attempt to seize control of Belgian cabler Telenet.

Malone’s Liberty Media is talking to key Telenet shareholder Callahan Associates about buying its 21.6% stake in the company, but other shareholders are reportedly keen on a market listing next year and are concerned that a Malone takeover could stop such a listing.

Telenet backers include state-controlled venture capitalist GIMV, German cabler Interkabel and local energy firm Electrabel. None will comment on the discussions.

Sources suggest the possible sale is part of a broader discussion between Liberty Media and Callahan Associates about restructuring the operations run by the latter’s subsidiary Cable Partners Europe. Liberty is planning to pursue expansion in Europe and Asia, and Telenet would be a welcome addition to its portfolio.

Liberty already owns a significant share of the faltering European cable market, with a 74% interest in industry leader UPC, based in the Netherlands.

Telenet is flying high at the moment, with profits more than doubling in 2003 as it carried on snapping up new subscribers. Operating cash flow for the year was up 178.5% to $272 million, while consolidated operating revenues leaped 63.6% to $611.4 million.