Potential NTL owner buys Swiss operator

27 Oct 2005

Liberty Global, which owns Irish cable network operator Chorus and whose €325m bid to buy NTL Ireland is currently being assessed by the Competition Authority, in recent days completed the acquisition of Swiss cable broadband giant Cablecom for €1.73bn (US$2.82bn).

The company said it has completed the previously announced acquisition of 100pc of the equity of Cablecom Holdings AG for US$2.82bn in cash. It says it financed the cash purchase by using a combination of US$1.2bn of existing cash and the proceeds of US$1bn from newly issued debt securities.

“Cablecom is the largest broadband cable operator in Switzerland in terms of subscribers. With the transaction completed, Liberty Global adds a major new market to its European footprint and now operates the largest broadband cable business in terms of subscribers in 11 of its 14 European markets,” the company said in a statement.

In May, Liberty Global through its subsidiary UGC, following a heady-bidding process, agreed with investment bank Morgan Stanley to buy NTL’s Irish subsidiary, depending on regulatory approval from the Competition Authority for €329m. The total purchase price is approximately €325m excluding an adjustment for cash in the business at closing, plus a €4m arrangement fee and reimbursement of certain expenses and costs incurred by Morgan Stanley.

Liberty Global also owns Irish cable operator Chorus, which it acquired last year for €55m.

Sources say ownership of both NTL and Chorus would not only give Liberty a dominant presence in Ireland’s cable TV and internet sector but a much needed €200m cash injection to upgrade infrastructure would create a meaningful competitor to incumbent telecoms player Eircom and a much needed shot in the arm for Ireland’s flagging communications infrastructure.

However, ownership of two of Ireland’s biggest cable operator raises significant competition issues. It is understood the Competition Authority, under the directorship of Ted Henneberry, has set itself a deadline of 8 December to rule on Liberty’s ownership of NTL Ireland.

Liberty describes itself as the largest cable broadband operator outside the US in terms of subscribers. Excluding NTL, which the company says it consolidates but does not control, it says its global networks passed around 23.5 million homes and served approximately 14.9 million revenue generating units, including 10.7 million video subscribers, 2.5 million broadband internet subscribers and 1.8 million telephone subscribers.

By John Kennedy