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Telenet Raises Shareholders' Wealth

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The Belgian cable TV operator Telenet Group Holding NV has decided to return 950 million Euros (approximately $1.3 billion) to its investors. Of this, 900 million Euros will be distributed through cash and the remaining 50 million Euros will be paid in the form of share repurchase program. Telenet is controlled by Liberty Global Inc. (LBTYA - Free Report) . At present, Liberty Global has Zacks Rank #2 (Buy).

Last month, Liberty Global increased its stake in its Belgian subsidiary, Telenet to 58.4% from its existing 50.2% stake. In September 2012, Liberty Global decided to acquire the remaining 50% stake in Telenet for approximately $2.6 billion.

Accordingly, in December 2012, the company launched a cash offer for Telenet's shares and securities through its subsidiary Binan Investments B.V. However, the shareholders have successfully blocked the plan of Liberty Global to take full control of Telenet.

Telenet is an integrated telecom company offering television, broadband and mobile phone services in the Dutch-speaking north Belgium. In the third quarter of 2012, Telenet generated $461 million in revenue for Liberty Global and it had 2.134 million subscribers.

At present, Liberty Global is concentrating solely on Europe and some parts of Latin America. From early 2010, Liberty Global is gradually concentrating on strengthening its foothold in Europe through a series of mergers and acquisitions.

On Feb 5, 2013, Liberty Global came out with a joint press statement with Virgin Media Inc. , that the two companies have entered into an agreement par which, Liberty Global will acquire a 100% stake in Virgin Media in a cash and equity deal.

The deal is expected to be of $15.8 billion or an enterprise value of nearly $23.3 billion.  Both the companies are expecting the deal to be completed by the second quarter of 2013, subject to customary regulatory approval.

If this deal gets approved, then Virgin Media will become a formidable challenger to BSkyB, the largest pay-TV operator of the U.K. and BT Group plc. (BT - Free Report) . BSkyB is partially controlled by News Corp. (NWSA - Free Report) .

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