French Sale News Boosts Liberty Global3/24/2006 7:00 PM Eastern
Liberty Global Inc. shares rose more than 8% ($1.54 per share) March 23, after the international cable operator said it would sell its French cable operations for $1.5 billion in cash.
Liberty Global reached an agreement to sell the French operations — UPC France — to private-equity firm Cinven Group and cable operator Altice. The deal is expected to close in the second quarter.
Liberty Global stock went as high as $20.10 per share — up $1.54 per share, or 8.3% — in early trading March 23, before winding down to close at $19.74 each, up $1.18 per share or 6.4%.
UPC France has about 928,600 analog cable customers, mostly in Paris.
The deal is in line with Liberty Global's strategy to divest properties in markets where it does not have sufficient scale.
Competition in the French cable market has been heating up: Vivendi Universal S.A. recently merged its CanalSat direct broadcast satellite operations with No. 2 French satellite provider TPS; and France Telecom aggressively rolled out its own IPTV product — Livebox — to 1.6 million customers in France in 2005 alone.
According to Liberty Global's 10-K annual report, UPC France had revenue of $513.8 million in 2005, a 64.2% increase over 2004's revenue of $312.9 million. Operating cash flow more than doubled to $97.3 million, compared to $45.8 million in 2004.