Morgan Joseph Maintains a 'Buy' on Liberty Global (LBTYA); Paying Up for Long-Term Value Creation

Morgan Joseph maintains a 'Buy' on Liberty Global (NASDAQ: LBTYA), PT $45.

Morgan analyst says, "We view the acquisition of the KBW in Germany favorably despite the premium multiple. We believe Liberty’s second transaction in the German market should create value and raise the group’s overall growth rate. The €3.16bn ($4.48bn) acquisition of Kabel BW Erste Beteiligungs GmbH (“KBW”), the third largest cable TV operator in Germany, was valued at 8.1x 2011E EBITDA (under IFRS) with synergies. KBW’s 2010 EBITDA was reportedly €316mm on sales of €563mm. Pending regulatory approval, the transaction is expected to close in 2H11; hence, we don’t expect much impact on the 2011 numbers, although we could see some one-time charges late in the year."

For more ratings news on Liberty Global click here and for the rating history of Liberty Global click here.

Shares of Liberty Global closed at $41.00 yesterday.

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