Liberty Global to Sell J:COM Interest to KDDISunday, January 24th, 2010
ENGLEWOOD, Colorado — Liberty Global, Inc. (“Liberty Global,” “LGI,” or the “Company”) (NASDAQ: LBTYA, LBTYB and LBTYK) today announced that it has reached an agreement to sell its subsidiaries that directly or indirectly hold its 37.8% ownership interest in Jupiter Telecommunications Co., Ltd. (“J:COM”), a leading broadband provider of communications services in Japan, to KDDI Corporation, the second largest wireless operator in Japan.
Liberty Global is selling for cash its subsidiaries that directly or indirectly hold its interest in J:COM, including those subsidiaries which collectively own its interest in LGI / Sumisho Super Media LP (“Super Media”). Additionally, Liberty Global will retain the right to receive the anticipated final 2009 dividend of ¥490 per share attributable to its interest in J:COM that is expected to be approved at the March 2010 J:COM shareholders meeting. Including both the agreed upon purchase price and the anticipated dividend, Liberty Global expects to realize gross proceeds of approximately ¥363 billion ($4.0 billion as of January 22, 2010).
This would imply a transaction value on LGI’s attributable 2.6 million J:COM shares of approximately ¥140,000 per J:COM share, representing an approximate 65% premium to J:COM’s closing share price on January 22, 2010. The transaction represents an enterprise multiple of approximately 8.3 times J:COM’s September 30, 2009 last twelve months consolidated operating cash flow, as customarily defined by Liberty Global. In terms of net proceeds, LGI will repay the ¥75 billion ($833 million as of January 22, 2010) LGJ Holdings credit facility and will incur certain costs and taxes. Prior to closing, Sumitomo Corporation’s (“Sumitomo”) interest in Super Media will be redeemed for the J:COM shares attributable to it and LGI will acquire the minority interests in one of the subsidiaries to be sold. Closing of the transaction is subject to the satisfaction of certain conditions and is expected to occur on or around February 10, 2010, subject to extension.
Mike Fries, President and Chief Executive Officer of Liberty Global, said, “Our investment in J:COM and our partnership with Sumitomo over the last 15 years have both been extremely successful and gratifying. The J:COM management team and, in particular Liberty Global executives Miranda Curtis and Graham Hollis, have created a world class operation and substantial value for our shareholders. While we pride ourselves on being long-term operators, we have also demonstrated a disciplined and opportunistic approach to rebalancing our business interests globally. Exiting the Japanese market at a substantial premium allows us to redirect our capital into more strategic consolidation opportunities in our core markets as well as our ongoing stock buyback initiatives.”
Liberty Global is being advised by JPMorgan in connection with this transaction.