Liberty Global strikes Virgin Media deal for $15.75 bn

US cable operator Liberty Global Inc yesterday agreed to buy UK's second-biggest pay-TV operator Virgin Media in a $15.75-billion stock and cash deal, a move that would pit it against media mogul Rupert Murdoch's BskyB.

Including debt, the deal is valued more than $23 billion.

Under the terms of the deal, Virgin Media shareholders will receive $17.50 in cash, 0.2582 Liberty Global class A shares and 0.1928 Liberty Global class C shares for each Virgin Media share.

Based on yesterday's closing prices for those shares, each Virgin Media share is valued at $47.02, a premium of 24-per cent to Virgin Media's closing price on Monday, and is slightly higher than Tuesday's closing price of $45.61, when Financial Times broke the story on the potential deal. (See: US cable operator Liberty Global planning to bid for Virgin Media: report)

As a result of the proposed acquisition, Virgin Media shareholders will own 36 per cent of Liberty Global's outstanding shares with 26 per cent of the voting rights.

The combined company generated $16.8 billion in revenue in 2012 and operating cash flow of $7.5 billion.