NEW YORK (AP) -- Liberty Global Inc., the cable TV operator controlled by media mogul John Malone, is buying U.K.-based Virgin Media Inc. in a $16 billion deal that steps up the rivalry between Malone and fellow billionaire Rupert Murdoch. <\/p>\n
Liberty Global is paying $5.9 billion in cash and the rest in stock for Virgin Media. The combination, announced late Tuesday, will provide stiffer competition in the U.K. to satellite TV provider BSkyB, in which Murdoch's News Corp. owns a 40 percent stake. The combined company will become one of the world's largest providers of cable TV, Internet and phone services, with 25 million customers in 14 countries. <\/p>\n
\"Liberty Global together with Virgin Media is a powerful combination,\" Liberty Global President and CEO Michael Fries said Wednesday on a conference call with investors. \"In fact, it hits the mark on just about every strategic and operating criteria we have established for our company and provides significant benefits to Virgin Media subscribers and investors.\" <\/p>\n
Liberty Global is the largest cable operator in most of its 11 European markets. Virgin Media is the second-biggest pay TV company in the U.K. after BSkyB, or British Sky Broadcasting Group PLC. <\/p>\n
Fries said that after the deal, about 80 percent of the company's revenue will come from five countries: the U.K., Germany, Belgium, Switzerland and the Netherlands. The two companies said they had combined revenue of $16.8 billion last year. <\/p>\n
Besides the cable TV, Internet and landline phone operations, Virgin Media runs a mobile phone business. That's a business Liberty Global doesn't currently have. Virgin Group boss Richard Branson a multibillionaire, like Malone and Murdoch has a minority stake in Virgin Media. <\/p>\n
The companies said the transaction is equal to $47.87 per Virgin Media share. That's about a 24 percent premium on the closing price of Virgin Media's U.S.-traded stock on Monday. Each Virgin Media shareholder will get $17.50 in cash and get the rest of the value in Liberty Global stock. <\/p>\n
\"This deal delivers attractive value now and exposure to a very compelling growth equity story,\" Virgin Media CEO Neil Berkett said on the conference call, pointing to the stock premium. <\/p>\n
Virgin Media's U.S. shares fell 82 cents, or 1.8 percent, to $44.79 in afternoon trading Wednesday, a day after surging almost 18 percent to close at $45.61 after the company acknowledged it was in acquisition talks with Liberty Global. Liberty Global's stock fell $2.29, or 3.4 percent, to $65.69. <\/p>\n
Liberty Global's Englewood, Colo., headquarters and main U.S. offices will remain in place, and its shares will continue to trade on the Nasdaq Stock Market. But the company will change its legal headquarters to the U.K. by becoming a subsidiary of a new U.K.-based holding company, which Fries said will give it more strategic and financial flexibility. <\/p>\n
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Liberty Global to buy Virgin Media for $16B<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" NEW YORK (AP) -- Liberty Global Inc., the cable TV operator controlled by media mogul John Malone, is buying U.K.-based Virgin Media Inc. in a $16 billion deal that steps up the rivalry between Malone and fellow billionaire Rupert Murdoch Continue reading