Liberty Global Gets Virgin Media - Analyst Blog
17 Abril 2013 - 10:05AM
Zacks
Recently, Liberty Global
Inc. (LBTYA) received a shot on its arm as the European
Union Regulatory Authority cleared its proposed acquisition of
Virgin Media Inc. (VMED). On Feb 2013, Liberty
Global came out with a joint press statement with Virgin Media that
the two companies have entered into an agreement par which, Liberty
Global will acquire a 100% stake in Virgin Media, in a cash and
equity deal. The deal is worth around $15.8 billion or an
enterprise value of nearly $23.3 billion.
After the acquisition, Liberty
Global will become the largest cable TV MSO (multi service
operator) of the world, surpassing Comcast
Corp. (CMCSA), the largest cable MSO of the U.S. Together,
Liberty Global and Virgin Media will have approximately 25 million
subscribers compared with nearly 22 million subscribers of Comcast.
In U.K., the merged entity will become a formidable challenger to
BSkyB, the largest pay-TV operator of the U.K. BSkyB is partially
controlled by News Corp. (NWSA).
Liberty Global is gradually
establishing a strong foothold in the European cable TV market. We
believe that the long-term business fundamental of the company is
very intriguing, primarily due to a strong demand for its digital
cable-TV services, faster broadband and triple-play bundled
offerings. Acquisition of Virgin Media will enable Liberty Global
to explore U.K., which is one of the most lucrative markets in
Europe.
In the coming years, we believe
Liberty Global’s revenue will continue to benefit from a ‘triple
play’ of video, broadband, and telephone, as it signs up more
“bundled” customers in Europe. The triple-play customer base
spurted 15.8% year over year in 2012. The company is also
concentrating on its double play product, Internet and telephony,
which has the potential to expand. Double play customer base
penetration nudged by 5.6% year over year in 2012.
COMCAST CORP A (CMCSA): Free Stock Analysis Report
LIBERTY GLBL-A (LBTYA): Free Stock Analysis Report
NEWS CORP INC-A (NWSA): Free Stock Analysis Report
VIRGIN MEDIA (VMED): Free Stock Analysis Report
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