UGC offer indicates Malone's ambitions
By Peter Thal Larsen in New York
Published: January 13 2004 0:04
published in Financial Times, UK
John Malone (pictured), the US media investor, is renewing his hunt for European cable assets just two years after a plan to take control of the German cable industry was rejected by regulators.
UnitedGlobalcom, the cable group controlled by Mr Malone's Liberty Media, on Monday announced plans to raise $1bn through a rights offering. The move came just a few days after Liberty completed a move to take a controlling stake in the company, which reaches 12.6m potential subscribers in Europe and South America.
UGC said the cash would help to repay debts and be used for "general corporate purposes". However, industry observers said Mr Malone was likely to be eyeing up potential acquisitions of cable assets in Europe, where the industry is less well developed than in the United States and valuations are much lower.
The move opens up a new front in Mr Malone's attempts to expand his media interests after a period in which he has been preoccupied with cleaning up Liberty's corporate structure. The company has taken control of QVC, the home shopping channel. It also made a bid for the US entertainment assets of Vivendi Universal but was outbid by NBC, the media arm of General Electric.
Investors have in the past criticised Liberty Media because much of its value comes from passive holdings in large media groups such as Time Warner and News Corporation.
Mr Malone has attempted to establish a position in the European cable business in the past, building up a controlling stake in Telewest and making an offer for Deutsche Telekom's cable assets in Germany. However, Telewest was hit by financial woes which forced into a debt-for-equity swap, while German regulators rejected Mr Malone's offer.
UGC is the largest cable operator in the Netherlands, and also offers a satellite TV service in Hungary, the Czech Republic and Slovakia. Outside the United Kingdom, European cable groups have been slow to upgrade their networks to carry digital television, telephony and high-speed internet services. They have also been hampered by government regulations which limit price increases.
Shares in UnitedGlobalCom on Monday closed down 22 cents at $9. |
