Belgian cable operator Telenet said that the report produced by independent expert Lazard values Telenet shares at EUR 37-42, higher than Liberty Global's buy-out bid at EUR 35 per share. Lazard said it compared Telenet to peers such as Ziggo and Virgin Media, adding a premium of 20 percent based on the activities of the company's directors.
Liberty Global said that it had "serious reservations" regarding the report and its valuation methodology, especially as it's based on a revised long-term outlook for Telenet issued after Liberty first announced its intention to launch a buy-out bid. The company believes the assumptions form a speculative plan that cannot be reasonably achieved or implemented.
In particular, Liberty questions the increased contribution from mobile services to Telenet's results included in the improved outlook, which Liberty Global views as being unachievable given the aggressive expectations of market share gains. Furthermore, the outlook issued by Telenet's management was not reviewed by the board before being passed to Lazard, nor do Liberty Global representatives on the board support the forecasts.
Liberty Global assesses Telenet at EUR 28-35 per share, as advised by Morgan Stanley. The company intends to proceed with its intended offer of EUR 35 per share, but has decided to drop the condition of at least 95 percent of shares tendered. Its bid documents will include further details on its valuation of Telenet as well as a response to the Lazard report.
Telenet said it will review the offer, with the assistance of UBS. The cable operator added that its independent directors are currently preparing a dissenting opinion to the bid, also contesting the price. Liberty Global already owns 50.4 percent of Telenet.
