Liberty Global, the European cable business of US billionaire John Malone, yesterday acquired a 12.650-per cent stake in the Netherlands' largest cable operator Ziggo for €632.5 million ($808 million).
Liberty Global purchased 25.3 million shares from Barclays Capital Securities for €25 each.
Post sale, Ziggo's share price surged by 12 per cent to €27.15 on speculation that the Colorado-based company will eventually launch a full takeover and merge Ziggo with its rival UPC, also owned by Liberty Global.
The move comes barely a month after Liberty Global agreed to buy UK cable-television and internet provider Virgin Media for $15.75 billion.
The Ziggo deal does not require regulatory approvals since Liberty Global is not seeking a controlling interest.
Liberty Global said that the investment in Ziggo is an "attractive opportunity to make a strategic investment in a market where it already enjoys a sizable presence" through its own cable unit UPC - the second-largest cable provider in the Netherlands.
"The purchase price is also financially attractive given the stock's approximate 7.4 per cent dividend yield, which is implied by Ziggo's expectation that it will pay €370 million of dividends during 2013," Liberty Global said in a statement.
Ziggo is the largest cable operator in the Netherlands, providing cable television, Internet, and telephone services to more than 4 million residential and commercial customers.
Liberty Global, formed through the 2005 merger of Liberty Media and UnitedGlobalCom, operates in 13 countries in Europe, and is the largest cable operator in Poland, Switzerland, Belgium, Austria, Slovakia, Hungary and Czech Republic.
Liberty Global's consumer brands include UPC, Unitymedia, Kabel BW, Telenet and VTR. It also has a 50-per cent stake in MGM Networks in the US through Europe-based Chellomedia.
Eighty per cent of its revenue comes from Europe, of which, two-thirds comes from four countries, Belgium, the Netherlands, Switzerland and Germany.
Last year it fully acquired Belgian peer Telenet Group Holding NV for $2.56 billion.
In terms of revenues, Telenet is Liberty's second largest business after its European division UPC. With 18.4 million customers, Europe is Liberty Global's biggest market.