Liberty Global to Buy Dutch Cable Provider Ziggo

LONDON - Liberty Global, the media company controlled by billionaire John C. Malone, has agreed to acquire Ziggo, the largest provider of cable television in the Netherlands, in a cash-and-stock deal that values Ziggo at about $13.7 billion.

The conditional agreement, announced on Monday, comes four months after Ziggo rebuffed a takeover approach by Liberty Global, calling the proposal at the time “inadequate.”

Under the deal, Ziggo shareholders will receive 11 euros in cash, plus Liberty Global shares. Based on Friday’s closing price of Liberty’s shares, the offer values Ziggo at €34.53 a share. The transaction represents a 22 percent premium to Ziggo’s closing price the day before it announced that it had received a preliminary takeover offer from Liberty Global in October.

Combined with a 28.5 percent stake Liberty Global previously took in the cable provider last March, the deal values Ziggo at about €10 billion.

Mike Fries, Liberty Global’s chief executive, said the combined operations will reach over 90 percent of Dutch households, “allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands, and at the same time generate significant revenue and operating efficiencies.”

The deal will combine Liberty Global’s existing Dutch operations, UPC Netherlands, with Ziggo’s business, creating a combined company with €2.5 billion in revenue. UPC Netherlands is the second largest cable provider in the Netherlands.

“For Ziggo this is a great opportunity to create a Dutch industry leader together with UPC Netherlands,” said Andrew Sukawaty, chairman of Ziggo’s supervisory board. “In essence, this transaction is about two Dutch companies coming together. Our customers will benefit as the new combination has an agenda of investing in growth and innovative solutions, helping customers to enjoy media and entertainment even more while at the same time ensuring a high level of data-security and privacy.”

Based in Utrecht, the Netherlands, Ziggo provides cable television, broadband and telephone service to about 2.8 million households.

Ziggo’s supervisory and management boards have unanimously recommended that shareholders accept the deal. The transaction, which is expected to close in the second half of this year, is predicated on Liberty Global receiving 100 percent of the company’s outstanding shares.

The deal is subject to regulatory approval. Liberty Global plans to fund the transaction through debt financing.

Ziggo has agreed not to solicit other offers, but the deal could be terminated in a more beneficial offer with a higher price is made in the next eight weeks. Liberty Global has the right to match any offer.

Liberty Global, the international broadband arm of Mr. Malone’s media and telecommunications empire, also owns Virgin Media in Britain, Unity Media in Germany and Telenet in Belgium.

Bank of America Merrill Lynch and Morgan Stanley served as financial advisers to Liberty, while Ziggo was advised by JPMorgan Chase and Perella Weinberg Partners. The legal advisers were Allen & Overy for Liberty and Freshfields Bruckhaus Deringer for Ziggo.