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Liberty Global to sell certain operations to Vodafone.

M2 EQUITYBITES-May 14, 2018-Liberty Global to sell certain operations to Vodafone

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Liberty Global plc (NASDAQ: LBTYA, LBTYB and LBTYK) has announced that it has entered into a definitive agreement to sell its operations in Germany, Hungary, Romania and the Czech Republic to Vodafone Group plc for a total enterprise value of approximately EUR 19.0 billion (USD 22.7 billion) on US GAAP basis, as compared to EUR 18.4 billion (USD 22 billion) on an EU-IFRS basis, the company said.

These four businesses represented approximately 28% of Liberty Global's consolidated 2017 operating cash flow ("OCF"), which does not include its 50% share of OCF from the VodafoneZiggo joint venture in the Netherlands.

The sale price represents a total enterprise value for all four businesses combined of 11.5 times 2017 adjusted Segment OCF, or approximately 24.0 times 2017 operating free cash flow ("OFCF")5, with an implied adjusted Segment OCF multiple for Liberty Global's German operation of 12.0 times.

The transaction will be notifiable to the European Commission for regulatory approval, which is expected to occur mid-2019.

After completion of the transaction, Liberty Global will continue to be Europe's cable television and broadband provider, with consolidated operations in the United Kingdom, Ireland, Belgium, Switzerland, Poland and Slovakia. Together, these country operations reach 24 million homes, account for 26 million video, broadband and fixed-line telephony subscribers and 6 million mobile services. In addition, Liberty Global owns 50% of VodafoneZiggo, a joint venture in the Netherlands with 4 million customers subscribing to 10 million fixed-line and 5 million mobile services.

LionTree and Goldman Sachs are acting as financial advisers to Liberty Global on the transaction.

Liberty Global is the world's largest international TV and broadband company, with operations in 11 European countries under the consumer brands Virgin Media, Unitymedia, Telenet and UPC. In addition, Liberty Global owns 50% of VodafoneZiggo, a joint venture in the Netherlands with 4 million customers subscribing to 10 million fixed-line and 5 million mobile services, as well as significant investments in ITV, All3Media, ITI Neovision, Casa Systems, LionsGate, the Formula E racing series and several regional sports networks.

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Publication:M2 EquityBites (EQB)
Geographic Code:4EUNE
Date:May 14, 2018
Words:373
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