UPC leaves Ziggo alone for a while

Ziggo and UPC are not discussing a merger with each other. That says Ziggo CEO Bernard Dijkhuizen in conversation with the FD. The owners simply want to bring the cable dealer to the stock market. Ziggo announced this week its long-awaited IPO, although few details were released. Ziggo NV wants to convert shareholders' loans into shares and distribute 220 million euros in dividends in 2012 and a dividend in 2013 of at least 50 percent of the 'free cash flow to equity'

Ziggo and UPC are not discussing a merger with each other. That says Ziggo CEO Bernard Dijkhuizen in conversation with the FD. The owners simply want to bring the cable dealer to the stock market.

Ziggo announced this week its long-awaited IPO, although few details were released.

Ziggo NV wants to convert shareholders' loans into shares and distribute 220 million euros in dividends in 2012 and a dividend in 2013 of at least 50 percent of the 'free cash flow to equity'. Ziggo is the largest cable company in the Netherlands, with 3 million households as a customer.

Shareholders Cinven and Warburg Pincu had plans for an IPO before, but decided to wait due to the turmoil on the financial markets. They have invested one billion euros in the network infrastructure.

Analysts nevertheless take into account that UPC owner Liberty Global will still make a bid for the shares just before the IPO. It also did so when the owners of the German industry counterpart KBW shielded with stock plans in 2011.

A merger between the two major cable operators nevertheless seems logical: the companies both have no national coverage, and already work together with the mobile infrastructure that they are likely to share. The main competitor KPN does have national reach, but struggles with a very outdated ADSL infrastructure. KPN only invested cautiously, via Reggefiber, in the installation of optical fiber. The cable sector invested around 5 billion euros this century in the modernization of the cable network.