In a significant move to achieve full ownership of Belgium’s Telenet, Liberty Global has increased its stake in the telecommunications firm to 93.23%. The acquisition has come at a notable investment, with Liberty Global paying an estimated €763 million to secure approximately 34.7 million shares.
Before the transaction, Liberty Global, inclusive of shares held by Telenet itself, had a bit over 62% stake in the company. The tender offer, which concluded on July 12, resulted in a significant increase in shareholding. Although the company will effectively pay €21 per unit on the payment date, this doesn’t alter the overall financial implications.
The persistent quest by Liberty Global isn’t done yet. It’s ready to shell out more to acquire the remaining shares. As per market regulations, the over 90% ownership threshold achieved jointly by Liberty Global and Telenet allows for a reopening of the tender offer. This will enable more shareholders to sell their stakes if they so wish, between August 24 and September 13.
Liberty Global stated that the offer’s reopening offers investors, who missed the initial acceptance phase, or those in need of added liquidity, an open chance to accept the bid. It is strategically hinting that some shareholders are not deliberately holding out.
The stakeholder distribution might change again. If Telenet and Liberty Global jointly hold over 95% of Telenet’s shares and more than 90% of the shares covered by the offer after the new offer period, a squeeze-out would follow. Under these conditions, remaining Telenet shareholders would be obligated to surrender their shares on similar financial terms.
If Liberty Global’s suggestion that some shareholders missed the first offer or their situations have changed is correct, it might find itself with complete ownership of Telenet soon. This is a progressive outlook for a firm that has desired such an outcome for the past decade, with their first attempt occurring in January 2013.
These developments happen in a critical time for Telenet, given the recent changes in the Belgian communications market. With the acquisition of VOO by Orange raising competition concerns at the EU level, Brussels identified Telenet as a panacea. Having brokered a network-sharing deal with Orange, Telenet can bolster its fixed-line presence. It’s also a major mobile player as the owner of the operator Base.
There is a potential growth opportunity, and this provides a plausible reason for Liberty Global’s zealousness in acquiring Telenet’s shares.
