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Virgin Media (VMED) Acquired by Liberty Global (LBTYA) in $23.3B Deal

February 5, 2013 9:30 PM EST Send to a Friend
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In a deal highly anticipated throughout the day, Virgin Media, Inc. (NASDAQ: VMED) announced an agreement Tuesday evening to be acquired by Liberty Global, Inc. (NASDAQ: LBTYA) for $23.3 billion in cash and stock.

The combined company will create one of the leading broadband communications company, covering 47 million homes and serving 25 million customers across 14 countries. The deal will be accretive to free cash flow.

The company announced an increased commitment to shareholder returns, leveraging the financial strength of the combined company, which generated $16.8 billion of revenue and $7.5 billion of Operating Cash Flow (OCF) in 2012.

Under the terms of the agreement, Virgin Media shareholders will receive $17.50 in cash, 0.2582 Liberty Global Series A shares and 0.1928 Liberty Global Series C shares for each Virgin Media share that they hold. Based on Liberty Global's Series A share price of $69.46 and Series C share price of $64.50 as of February 4, 2013, this implies a price of $47.87 per Virgin Media share, reflecting a 24% premium to Virgin Media's closing price on February 4, 2013.

Mike Fries, President and CEO of Liberty Global, said: "Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we've been successfully using for over seven years. Virgin Media will add significant scale and a first-class management team in Europe's largest and most dynamic media and communications market. After the deal, roughly 80% of Liberty Global's revenue will come from just five attractive and strong countries - the UK, Germany, Belgium, Switzerland and the Netherlands."

The transaction is subject to majority approval from both companies' shareholders, regulatory approvals and other customary closing conditions. The respective shareholder meetings, as well as the closing of the transaction, are expected to occur in the second quarter of 2013. Through certain trust arrangements, Mr. John Malone controls in excess of 35% of the voting power of Liberty Global, and he has committed to support the transaction in his capacity as a shareholder.




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