Telenet’s independent directors again said that Liberty Global International’s bid for outstanding Telenet shares was too low. The group agreed with Telenet’s management board that the EUR 35 per share bid is just not enough. The four directors said they would support a bid at EUR 39-40 per share. Liberty Global announced its bid on 20 September.
LGI officially opened its “voluntary and conditional cash offer” for Telenet, reiterating its bid at EUR 35 per share via unit Binan Investments. Shareholders will have until 11 January at 04.00 pm before the initial acceptance period closes. LGI said its offer provided a 12.5 percent premium to Telenet’s closing price on 19 September, a 15.2 percent premium compared to peer group Ziggo, Kabel Deutschland Holding (KDG), Virgin Media and LGI, a 2.9 percent premium to future target prices and a 17.4 percent premium over the mid-point discounted cash flow based valuation.
LGI said it did not agree with certain methodologies used by Telenet’s independent expert and independent directors in their analyses of the offer.
Telenet said on 30 October that the bid was insufficient, based on a report put together by Lazard. The analysis estimated Telenet’s value at EUR 37-42 per share, based on its expectations for 2012, in comparison to peers such as Ziggo and Virgin Media, and with a share premium of 20 percent on the back of director activities.
Independent director Frank Donck said that thanks to the support of Liberty Global, Telenet has become a leading European cable operator with many innovations, strong products, a good management team and a “relentless customer focus." Reason enough for a higher valuation.
The independent directors reiterated their willingness to continue working on the bid. Liberty Global, partly basing itself on a report by Morgan Stanley, feels that Telenet is worth EUR 28-35. LGI already owns 50.04 percent of Telenet shares.
After putting his shares in a recently formed Administrative Foundation, Telenet CEO Duco Sickinghe has no say in the process. The CEO wants to remain neutral and prevent conflicts of interest.
