Dutch cableco Ziggo has confirmed it will go ahead with an initial public offering (IPO) of its ordinary shares on the NYSE Euronext, reportedly likely to raise at least €600m (US$806.2m) for its founding shareholders.
Ziggo said in a statement…
Dutch cableco Ziggo has confirmed it will go ahead with an initial public offering (IPO) of its ordinary shares on the NYSE Euronext, reportedly likely to raise at least €600m (US$806.2m) for its founding shareholders.
Ziggo said in a statement today the IPO will consist of the secondary sale of a portion of shares held by founding shareholders, including affiliates of private equity owners Cinven and Warburg Pincus. The offering will be made to institutional and retail investors in the Netherlands as well as certain institutional investors abroad.
Reports estimated that the deal could raise between €800m and around €1bn.
JP Morgan Chase and Morgan Stanley are global bookrunners. Deutsche Bank and UBS are acting as joint bookrunners, Nomura Holdings, HSBC and ABN Amro are joint lead managers, and Societe Generale is co-lead manager.
Bankers following the transaction speculated in the meantime that US cableco Liberty Global might still come in with a last minute offer.
The company had stated its interest in Ziggo in the past, although Liberty CEO Mike Fries had been more cautious about chances for a bid for Ziggo in recent weeks. But the people following the transaction pointed out that the IPO plans put pressure on Liberty to make up its mind if it wanted to submit an offer or not.
Liberty Global has made last minute offers in the past, most recently when acquiring German cableco Kabel BW in 2011.
Ziggo said it will provide details on the size and time-frame of the offering when it releases its prospectus, however Reuters reported the IPO is expected to take place around 14 March. Ziggo will need to have its prospectus approved by the Netherlands’ financial market regulator, the AFM, in order to become a publically-listed company.
As part of the IPO, Ziggo said it plans to convert shareholder loans totalling about €2.28bn into equity.
The company said it plans to apply a progressive dividend payout policy targeting an initial €220m payout for 2012. From 2013 onward, it plans to pay a dividend of at least 50% of free cash flow to equity (FCFE).
The company recorded its FCFE for 2009, 2010 and 2011 as €186.1m, €310.4m and €303m respectively.
“We continue to assess our capital structure to allow us to increase our payout going forward to reflect increased cash generation and deleveraging. We believe that in the long-run, a net debt to EBITDA leverage ratio of approximately 3.5 to 1 is appropriate for the company, credit market conditions permitting,” the statement read.
In 2011, Ziggo recorded revenues of €1.48bn and EBITDA of €385m.
Ziggo chairman Andrew Sukawaty said the IPO, initially set to take place in 2011, has always been a priority for the company, which has about three million subscribers in the Netherlands.
“The company is fully prepared for a standalone future with full access to both the debt and equity capital markets,” he said. “I believe Ziggo is ideally suited to the public equity markets, offering strong differentiation through a unique combination of both growth and returns for investors seeking high-quality exposure to the European cable growth story.”
