Buyout firms plan Ziggo IPO

By Simon Meads and Victoria Howley

LONDON (Reuters) – Private equity firms Cinven and Warburg Pincus have hired STJ Advisors to prepare for an initial public offering that could value Dutch cable operator Ziggo (ZSHLOG.UL: Quote, Profile, Research) at around 7 billion euros, three sources said.

The buyout shops and boutique advisory firm STJ have been interviewing banks and could appoint bookrunners as early as next week, the people familiar with the process said.

“They are screening banks. They’ve owned the company for five years and its a logical time to think about an exit,” said one of the people.

A spokesman for Ziggo said: “No decision about an IPO has been made yet.”

The plans follow the fiercely contested sale of Germany’s Kabel Baden-Wuerttemberg (EQTPRK.UL: Quote, Profile, Research) earlier this month.

Seller EQT opted to sell that business to John Malone’s cable firm Liberty Global (LBTYA.O: Quote, Profile, Research) after jittery IPO markets closed down because of volatility in the Middle East and the earthquake in Japan.

Ziggo could also attract buyers, two other people said.

Private equity firms CVC and Hellman & Friedman could be among the interested parties, as well as Liberty Global, which already operates in the Netherlands under the UPC brand.

“Liberty Global is the obvious buyer, although the purchase of Kabel BW means it may have to sell assets elsewhere first because it won’t want to take on more debt for another acquisition,” a second person said.

The second person added that an IPO of two to three billion euros could emerge, although Ziggo’s owners would want to wait until market volatility had subsided.

CVC was outbid in the final stages of the Kabel BW sale, people familiar with the process said previously. Hellman & Friedman submitted a binding bid but did not progress as far as CVC in the Kabel BW auction, those people said.


Ziggo was built up by Warburg Pincus (WP.UL: Quote, Profile, Research) which initially invested in Multikabel in 2005, and then embarked on a classic build up strategy with partner Cinven (CINV.UL: Quote, Profile, Research), acquiring and incorporating other cable players.

The pair added Casema and Essent Kabelcom both in 2006, after which the company was rebranded as Ziggo.

Cinven lists the company as a 5.45 billion-euro investment on its website, which generated revenues of 1.2 billion euros in 2008.

Ziggo is the market leading cable operator in the Netherlands, providing television services to approximately 55 percent of all Dutch households.

Cable companies have become attractive investments since expanding their product offerings to include broadband and telephony.

They have successfully migrated cable customers toward new products, emerging as competitors to telecom operators in the process.

Cinven and Warburg Pincus declined to comment.

(Reporting by Simon Meads and Victoria Howley; Editing by Alexander Smith and Sophie Walker)

($1=.7065 Euro)

Buyout firms plan Ziggo IPO