Separate statements issued by Liberty Global and Telenet in respect of the former’s planned acquisition of the Belgian cable company have highlighted a major disagreement over Telenet’s worth.
Liberty Global already owns 50.4 per cent of Telenet, and September 20 made an informal bid of €35 a share for the Telenet shares it doesn’t already own.
In its Monday statement, Telenet said that an appraisal its independent directors commissioned from Lazard Ltd. came up with a valuation for the company of between €37 and €42 a share. It cited in part the prices paid historically by acquirers in similar deals.
Liberty Global responded with its own assessment, saying it disagreed with the Lazard valuation and would pursue its original offer. Liberty Global also said it would drop the deal’s 95 per cent minimum acceptance condition, which would result in the cable MSO increasing its majority without acquiring all of Telenet’s shares. That would be to the detriment to minority shareholders should Liberty Global decide to increase Telenet’s borrowings significantly.
“Liberty Global considers the offer price to be highly attractive for Telenet shareholders and intends to proceed with the intended offer as soon as practically possible, irrespective of the recommendation expressed by the independent directors of Telenet,” declared Liberty Global, adding that it had “serious reservations” regarding the long-term business plan assumptions that were used in the Lazard valuation report.
Telenet shares have been suspended since Thursday morning with the Belgian Financial Services and Markets Authority (FSMA) saying that the group was in possession of material information which it needed to make public. Now that information has been made public, the FSMA confirmed that trading would recommence at market opening on Tuesday October 30.