EU likely to approve LGI’s Virgin acquisition without conditions

9 Apr 2013

US-based Liberty Global Inc (LGI) looks set to gain approval from the European Union (EU) for its proposed acquisition of UK cableco Virgin Media, the Financial Times reports. It is claimed that the European Commission (EC), which is expected to reveal next week that it harbours no serious competition concerns should the GBP23.3 billion (USD35.7 billion) deal move forward, will not attach any conditions to its approval for the transaction.

As previously reported by CommsUpdate, in February 2013 it was confirmed LGI had reached a deal to acquire Virgin Media, under which shareholders in the latter would receive USD17.50 in cash, in addition to 0.2582 LGI Series A shares and 0.1928 LGI Series C shares, for each share they hold in the UK operator. LGI’s Series A share price of USD69.46 and Series C share price of USD64.50 as at 4 February 2013 implied a price of USD47.87 per Virgin Media share, and as such, the implied purchase price of the entire transaction, before taking into account transaction costs and other expenses, represented an equity value of approximately USD16.0 billion and an enterprise value of approximately USD23.3 billion. Meanwhile, the USD5.9 billion cash component of the equity purchase price is to be funded ‘largely through a combination of debt financing and available liquidity of both LGI and Virgin Media’. The transaction is expected to close in the second quarter of 2013.

United Kingdom, Liberty Global, Virgin Media