Liberty completes US$1.5bn Base buy

Telenet, the Belgian unit of pan-European cable giant Liberty Global, has completed its €1.325bn (US$1.49bn) acquisition of mobile network operator Base from Dutch telco KPN. In line with European Commission requirements, Base has simultaneously transferred its 50% stake in MVNO Mobile Vikings to Medialaan, enabling the broadcaster to become a fully-fledged MVNO. 

Telenet, the Belgian unit of pan-European cable giant Liberty Global (NASDAQ:LBTYA), has completed its €1.325bn (US$1.49bn) acquisition of mobile network operator Base from Dutch telco KPN (AMS:KPN).

In line with conditions agreed with the European Commission, Base has simultaneously completed the sale of its 50% stake in Mobile Vikings, which operates as a light MVNO on the Base network, to broadcaster Medialaan, Telenet said in a statement. The broadcaster is now the sole owner of Mobile Vikings.

The Commission approved the deal, first announced on 20 April 2015, on 4 February provided the parties sell part of their customer base to Medialaan, enabling it to compete effectively as a full MVNO. Customers of Base’s Jim Mobile MVNO will also be transferred to the broadcaster within the next two years. However, Telenet noted that the partner agreement between Base and Medialaan, under which Jim Mobile products are currently sold, will remain in place “for some time”.

London-based Liberty has also agreed to give Medialaan access to Base’s mobile network.

Commissioner Margrethe Vestager has said the conditions imposed on the merger are designed to ensure it “will not reverse the trend of declining mobile prices in Belgium in recent years”.

The acquisition has been financed with a combination of cash and loans. This has seen Telenet’s finance subsidiary fully draw the outstanding commitments under its €800m Term Loan AA as well as €200m and €217m under revolving credit facilities Z and X respectively. The remainder has been paid with cash.

Telenet noted that customers of both itself and Base will not see any changes for the time being.

In its own statement acknowledging the completion, KPN confirmed that the cash distribution to shareholders resulting from the Base sale will be combined with that that relating to its sale of 150 million shares in Telefoncia Deutschland in November 2015. As such, shareholders will receive a total €1.2bn (US$1.35bn) in the form of a capital repayment, equal to €.0.28 (US$0.31) per share, subject to shareholder approval at an AGM on 13 April. Payment is expected to be made in June.

JPMorgan advised KPN on the sale, while Goldman Sachs worked on the Liberty side.

The local mobile market is led by incumbent Belgacom’s Proximus, while the converged player would have a similar number of subscribers as Orange-owned Mobistar.