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Broadband Access
Cablecom Bought by Liberty Global
IPO Called Off
by Ouida Taaffe
Cablecom, the Swiss cable operator that was due to IPO on October 13, (read more) has been acquired by Liberty International, the pan-European cable operator for CHF2.825 bn (US$2.189 bn). The IPO, which was due to place over 35 million shares, had a pricing range of CHF57-70 (US$44-54).
Cablecom held an emergency board meeting last night to consider the Liberty Global bid and “concluded that a sale to Liberty Global is in the best interest of Cablecom, its shareholders, customers and employees” it said in a statement.
The market was taken unawares by the move, though there had been previously some questions around the route a sale of Cablecom might take (read more). “It’s a bit strange,” says James Enck, an analyst with Daiwa in London, “given that the IPO seemed to be on track and that they seem willing to accept a price below the indicative offer. It does raise questions about market sentiment and demand [for the stock].”
Liberty described the acquisition as “another important step in…building a pan-European cable company” and as providing Liberty with “instant scale and critical mass in Switzerland”. Liberty had not previously had a Swiss presence.
Whether large footprints do always bring the synergies and economies of scale they are credited with is still open to some debate. However, Enck points out that Liberty is likely to benefit from combined purchasing of equipment, that ownership of Cablecom gives it further a outlet for its media interests and that services such free on-net VoIP do gain from network effects.
The financial advisers on the Cablecom side were: Goldman Sachs International, Credit Suisse First Boston and Morgan Stanley and Co. International. JP Morgan Chase and UBS were the financial advisers to Liberty Global.
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