Cable business still whets M&A appetites

Winning a fierce €3.2bn ($4.6bn) battle for Kabel Baden-Württemberg, Germany’s third-largest cable television provider, has not sated Liberty Global’s appetite for assets in an industry that offers utility-like revenues and strong growth potential.

Shane O’Neill, chief strategy officer of the $9bn revenue company, told the Financial Times he is now doing the sums to see if Liberty Global can afford to pursue Ziggo, the private equity-owned Dutch cable operator. Its owners Cinven and Warburg Pincus are actively considering a flotation. Analysts and bankers believe it is the next business in the sector to be put up for sale or flotation. O’Neill, speaking after the agreement to buy KBW from EQT, the Swedish private equity firm controlled by the Wallenberg family, said: “The pot is not quite empty and Ziggo would be the next natural target. We will have to figure out whether it is financeable for us.” Liberty Global, part of John Malone’s cable empire, defeated private equity rivals to get KBW, which it hopes to combine with its existing asset Unitymedia, the second-largest German operator. One person who had been advising an underbidder observed: “Liberty has taken on all the regulatory risk in this deal. If the cartel office in Germany says no, they could lose a heck of a lot of money, so I suppose it’s a sign of just how good these businesses are that they will take this risk.”