Liberty Global to Acquire Unitymedia

Friday, November 13th, 2009 
Liberty Global logo

Second Largest Cable Operator in Germany

ENGLEWOOD, Colorado — Liberty Global, Inc. (“Liberty Global,” “LGI,” or the “Company”) (NASDAQ: LBTYA, LBTYB and LBTYK) today announced that it has entered into a share purchase agreement with Unity Media S.C.A. to acquire all of the issued and outstanding capital stock of Unitymedia GmbH (“Unitymedia”), Germany’s second largest cable operator.

Unitymedia is the largest cable television operator in the German federal states of North Rhine-Westphalia and Hesse, which are among the most prosperous and densely populated regions in Germany and Europe. The cable footprint, passing approximately 8.8 million homes, covers ten of the twenty largest cities in Germany, including Cologne, Dusseldorf, and Frankfurt. At September 30, 2009, Unitymedia reported approximately 6.4 million RGUs (as defined by Unitymedia), including 4.5 million analog and digital basic cable subscribers and 1.9 million new service RGUs (digital TV Pay, retail broadband internet, wholesale MMA internet, and telephony).

Liberty Global will acquire 100% of the shares of Unitymedia for an equity purchase price of €2.0 billion ($3.0 billion), from its parent, which is owned by a group of shareholders led by BC Partners and Apollo. Together with Unitymedia’s reported net debt at September 30, 2009 of approximately €1.5 billion ($2.2 billion), the total consideration is approximately €3.5 billion ($5.2 billion), excluding transaction costs, and represents a purchase price multiple of approximately 7.4 times our estimate of Unitymedia’s 2010 Adjusted EBITDA under IFRS accounting standards. Taking into consideration our estimate of the annual impact of synergies that may be realized following the full integration of the acquisition, the effective purchase price multiple would be approximately 6.6 times 2010 Adjusted EBITDA. Completion of the transaction is expected to occur in the first half of 2010 and is subject to regulatory approval.

In terms of financing the transaction, we are targeting debt financing on Unitymedia’s business of approximately €2.5 billion ($3.7 billion), of which the net proceeds, after refinancing Unitymedia’s existing
debt and transaction costs, will be available to fund a portion of the equity consideration. We anticipate that we will fund the remaining equity purchase price with a combination of existing liquidity available to LGI, the net proceeds from the sale of $750 million in convertible notes, excluding an overallotment option, and the sale to SPO Partners & Co., a long-standing large shareholder, of 4.5 million shares of Series A common stock and 1.5 million shares of Series C common stock at a price of $21.375 per share for gross proceeds of approximately $128 million.

Mike Fries, President and Chief Executive Officer of Liberty Global stated, “We are excited about this transaction as it complements our existing European footprint and has significant untapped growth potential in one of the fastest growing cable markets in Europe. The addition of Unitymedia not only enhances our European presence, but adds significant scale to our global operations, as our footprint, including Unitymedia, will exceed 40 million homes.”

“Unitymedia fits our strategy of operating best-in-class cable systems, bringing an experienced management team, a significantly upgraded network, and a product suite that is well-positioned to deliver superior value to its customers. We expect that Unitymedia’s growth will be meaningfully accretive to the overall profile of our European business and will benefit from substantial synergies in such areas as network operations and procurement. Adjusting for the transaction, we expect that our consolidated gross leverage would remain within our 4-5 times target range. Importantly, our free cash flow and long-term debt structure should allow us to continue our strategy of buying our own stock over time. We look forward to the addition of Unitymedia and believe it will help position us to continue delivering long-term value to our shareholders.”

Liberty Global is being advised by Goldman Sachs in connection with this acquisition.