Report: Malone Eyes Polish Cable Buy

Deal would consolidate Liberty Global holdings in country
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Liberty Global chairman John Malone is reportedly close to buying up a local cable operator in Poland in a deal that would consolidate the cable company’s holdings in that country.

According to Reuters, reports in Polish business newspaper Puls Biznesu said that Liberty is close to a deal with cable operator Multimedia and combining it with its UPC Polska operations,. The combined companies would cover half of the country with about 2.2 million subscribers.

UPC Polska is the largest cable operator in Poland. Any deal would have to be approved by regulatory  authorities. Terms of the deal weren’t disclosed but reports said the combined company would have annual revenue of about $574 million.

Liberty Global has been aggressive on the deal front – it completed a $7.4 billion buy of Caribbean telecom provider Cable & Wireless in May and has made a big splash in the European cable market in the past, snapping up Virgin Media in 2013 and partnering with Vodafone in February in a 50-50 joint venture to combine their Dutch operations in a deal valued at about $29 billion.

Malone was a big player in U.S. cable consolidation – his Liberty Broadband spinoff owns a 27% interest in Charter Communications and helped fund that cable company’s purchases of Time Warner Cable and Bright House Networks. After that landmark deal, the cable legend has apparently turned at least some of his attention to Europe, with reports saying he would be open to a deal with Vodafone, the continent’s largest wireless company. Talk of a Liberty-Vodafone deal has been common over the past several years – as early as 2014 the wireless conglomerate was reportedly considering a takeover -- but haven’t materialized, largely over valuation issues. That could still be the case although it hasn’t stopped the speculation.

On the domestic side, Malone also has been looking for a suitor for premium channel Starz, which was spun off from Liberty Media in 2013. In February 2015 Malone swapped a 4.5% stake in Starz for a 3.4% interest in movie studio Lionsgate, which fueled speculation that a combination was imminent. In February of this year, Lionsgate filed documents with the Securities and Exchange Commission noting it intended to start merger talks with Starz, but those discussions were cut off after Lionsgate stock fell hard on disappointing box office from the final installment in the Hunger Games franchise – Hunger Games: Mockingjay Part 2.

At the Gabelli Movies & Entertainment conference yesterday, Starz CEO Chris Albrecht echoed what he has said in the past, that more deals will happen in the space, whether it be between Viacom, Time Warner Inc., Starz or Lionsgate, but it all depends on the timing.

"Once something happens, there are going to more things that happen,” Albrecht said. “…I don't predict any particular occurrence, but I do predict that we will see more activity in the M&A space among the companies I mentioned and more, and young Dr. Malone will be somewhere, you can be sure," Albrecht said at the conference.  

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