US-based cable giant Liberty Global plans to proceed with its offer to buy out shares in Belgian cableco Telenet at €35 (US$45) each, despite a fairness opinion prepared for Telenet’s board of directors valuing them at €37 to €42.
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US-based cable giant Liberty Global plans to proceed with its offer to buy out shares in Belgian cableco Telenet at €35 (US$45) each, despite a fairness opinion prepared for Telenet’s board of directors valuing them at €37 to €42.
Outlining details of its intended voluntary and conditional cash offer for the almost 50% of Telenet shares it does not already own for about €2bn (US$2.6bn), Liberty said it has decided to remove a 95% minimum acceptance condition.
Liberty stated it believes the €35 per share price tag will be “highly attractive” to Telenet shareholders, stressing that it intended to move ahead with the intended offer as soon as practically possible, irrespective of the recommendations given to Telenet’s board of directors.
“Liberty Global continues to believe that the offer price represents a meaningful premium to its view on the intrinsic value of Telenet and a unique opportunity for the shareholders to monetise their entire investment at a time when the European cable sector is trading at a multi-year high,” the company said.
In its own statement published yesterday after market hours, Telenet disclosed details of the valuation prepared by Lazard. The investment bank’s valuation of the cableco’s shares at €37 to €42 each is based upon its “unaffected share price” on and around 19 September of about €31 and those of peers, which it put at about €31 to €34. Lazard then added a 20% premium which it stated aligns with similar previous transactions. The full report is expected to be made available shortly.
Liberty, advised by Morgan Stanley, values Telenet shares at €28 to €35 per share and today said it will provide details of the valuation process if and when the intended offer is launched. The company said it has “serious reservations” about the long-term business plan assumptions used in Lazard’s valuation report.
“Liberty Global believes that these assumptions form a speculative plan that cannot reasonably be achieved or implemented,” the company said, highlighting numerous concerns. The company noted it intends to details its objections in a submission to the Belgian Financial Services and Markets Authority (FSMA).
Meanwhile, Telenet, which acknowledged Liberty has informed it of its reservations, said its board of directors is continuing to review the intended offer and preparing to publish a response memorandum in accordance with Belgian takeover rules. UBS is acting as the company’s adviser on the matter. Telenet said its board is also preparing a “dissenting opinion” on various aspects of the offer, including price.
Liberty Global currently owns 50.4% of Telenet shares. Most of Telent’s outstanding shares are in freefloat. BNP Paribas Investment Partners is the largest minority shareholder, controlling 4.92% of shares. Thirty unlisted golden shares are held by vehicles controlled by the Belgian regional administrative authorities.
