Liberty Global's Telenet To Buy KPN's Unit BASE For $1.43 Bln

(RTTNews) - John Malone's cable company Liberty Global plc (LBTYA, LBTYB, LBTYK) announced Monday that its subsidiary Telenet Group Holding NV agreed to acquire KPN Group's Base Co. NV in an all-cash deal valued at 1.325 billion euros or $1.43 billion.

Base Co. is the the third-largest mobile network operator in Belgium, and also a broadband Internet brand operated by KPN Group Belgium.

"We fully support Telenet's acquisition of Base, which represents a cost-effective and unique opportunity to expand Telenet's mobile and fixed business in Belgium. Not surprisingly, the synergies are substantial and the price at 4.2x OCF is highly accretive to shareholders," Liberty Global CEO Mike Fries said in a statement.

Liberty said the deal represents a unique opportunity for Telenet to secure ownership of mobile capacity at an attractive price together with an efficient financing structure.

The deal will add nearly 3.3 million mobile subscribers of Base to Telenet's mobile subscriber base of more than 895,000 mobile subscribers.

"Given Telenet's scale in Belgium it can absorb the smaller Base business quickly and efficiently. Elsewhere in Europe we will continue to focus primarily on our existing MVNO arrangements and rapidly developing WiFi networks to provide seamless mobile voice and data services to our customers," Fries added.

Telenet plans to fund the deal through a combination of 1.0 billion euros of new debt facilities and existing liquidity.

Liberty Global said Telenet will spend an additional about 240 million euros to upgrade the capacity and quality of Base Co.'s mobile network and support systems. It will also spend part of the amount to integrate Base Co. with Telenet's operations, most of which will occur over the next few years.

Following the completion of the deal, Liberty Global estimates that Telenet's net leverage ratio under its existing bank facility, excluding synergies, would have been about 4.45x at December 31, 2014.

LBTYK closed Friday,s regular trading session at $48.70, down $0.67 or 1.36% on a volume of 3.36 million shares, and LBTYB closed at $50.56, down $0.67 or 1.30% on a volume of 1.80 million shares.