Denver and Utrecht, Netherlands – Liberty Global plc (“Liberty Global”) and Ziggo N.V. (“Ziggo”) have announced that they have reached a conditional agreement (the “Merger Protocol”) on a recommended offer (the “Offer”) pursuant to which Liberty Global will acquire Ziggo in a stock and cash transaction valuing Ziggo at approximately €10.0 billion ($13.7 billion). 

In addition, Liberty Global also announced that its Board of Directors has approved a stock dividend of one Liberty Global Class C ordinary share on each outstanding Class A, Class B and Class C ordinary share as of the record date for the stock dividend. It is expected that this stock dividend will be issued on March 3, 2014.

Under the terms of the Offer and adjusting for completion of the stock dividend, Ziggo shareholders will receive €11.00 in cash, 0.2282 Liberty Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary shares (0.1674 prior to completion of the stock dividend) for each Ziggo share that they hold (the “Offer Price”). Based on Liberty Global’s Class A share price of $83.27 and Class C share price of $78.80 as of January 24, 2014, the Offer implies a price of approximately €34.53 per Ziggo ordinary share.

Based on the 10-day VWAP price, this offer represents a 38% premium to the closing share price of Ziggo of €25.85 on March 18, 2013, the day before the previous private equity shareholders executed an equity sale that preceded Liberty Global’s acquisition of its initial stake in Ziggo and a premium of 22% to the closing share price of Ziggo of €29.24 on October 15, 2013, the day before Ziggo announced it had received a preliminary proposal regarding a potential offer for the company by Liberty Global.

In addition, Ziggo has agreed not to pay or declare any (interim) dividend or to make any distribution in kind until completion of the transaction.

A Strategic Cable Combination

• Reaching 7 million or over 90% of Dutch homes, the combined business will provide approximately 10 million video, broadband internet and telephony services to over 4 million unique customers through a fibre-rich cable network. With approximately €2.5 billion in total revenue, the combined company will be a leading provider of communication services across the Netherlands.

• Creates leading challenger in the mobile and enterprise businesses with the emergence of a nationwide cable operator, further ensuring sustainable competition throughout the Netherlands, benefiting the Dutch economy and society as a whole.

• Continued investment and innovation to benefit Dutch consumers, as our increased scale will drive efficiencies and enhance our ability to invest in the development of cutting-edge products and services.
• Planning to leverage Ziggo’s strong brand nationwide and capitalize on the deep bench of talented professionals at both companies, the new entity is well-positioned to deliver operational excellence with best-in-class customer service.

• Centralising Dutch operations at Ziggo’s Utrecht headquarters, which will be fully-equipped to serve the new combined company and benefit from being part of the wider Liberty Global group.

• Significant synergy opportunities as a result of scale advantages across core functional areas and leveraging Liberty Global’s pan-European platform, procurement and integration expertise.

• Unanimously recommended by Ziggo’s Supervisory and Management Boards, having concluded the transaction is in the best interests of Ziggo and its stakeholders (including its shareholders). The Offer is expected to close in the second half of 2014.

Mike Fries, Chief Executive Officer of Liberty Global, said: “This transaction creates a nationwide cable champion that will drive investment and innovation for the benefit of Dutch consumers and businesses alike. Our combined operations will reach over 90% of all Dutch households allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands, and at the same time generate significant revenue and operating efficiencies. We are targeting €160 million in annual run-rate synergies by 2018, which will underpin our growth profile over the next few years in the Netherlands and for Liberty Global overall, as we continue to build scale in Western Europe. Including the purchase of our initial 28.5% investment in Ziggo last year and the Offer Price for the remaining Ziggo shares, the blended transaction multiple on a synergised basis equates to 9.3x estimated 2014 EBITDA and 14.0x estimated 2014 EBITDA minus capital expenditures.”

Andrew Sukawaty, Chairman of the Supervisory Board of Ziggo, said “For Ziggo this is a great opportunity to create a Dutch industry leader together with UPC Netherlands. In essence, this transaction is about two Dutch companies coming together. Our customers will benefit as the new combination has an agenda of investing in growth and innovative solutions, helping customers to enjoy media and entertainment even more while at the same time ensuring a high level of data-security and privacy.The new Ziggo combines two regional networks. By joining forces they will stimulate and maintain the leading position of the Netherlands in the digital economy. For our employees the new combination will allow them to become part of a larger and stronger company, offering new perspectives and career opportunities. This transaction values Ziggo at 11.3x 2013 EBITDA and 18.4x 2013 EBITDA minus capital expenditures which provides our shareholders with a very attractive offer and at the same time by receiving Liberty Global shares allows them to participate in the future of a global industry leader.”

Liberty Global will fund the acquisition with a combination of shares and cash. The total consideration required to purchase the remaining shares is approximately €4.9 billion ($6.8 billion).Of the total consideration, the stock component equates to €3.4 billion ($4.6 billion) (the “Stock Consideration”) and the cash component equates to €1.6 billion ($2.2 billion) (the “Cash Consideration”), which excludes transaction and other costs.