Liberty Global Inc. (LBTYA) has decided to disinvest its Japanese operations. Today the company announced that its has entered into an agreement with KDDI Corp. to sell its subsidiaries that directly or indirectly hold 37.8% ownership interest in Japan’s Jupiter Telecommunications Co., Ltd.
Jupiter is a leading cable TV and broadband service provider in Japan. Liberty Global is expected to receive gross proceeds of approximately $4 billion in cash from this disinvestment subject to the regulatory approval.
After Comcast Corp. (CMCSA), Liberty Global is the second largest cable TV operator in the world. As of now, the company has approximately 16.6 million customers in 14 nations, most of which are in Europe.
The company is trying very hard to consolidate its position in the more lucrative European markets. Last November, Liberty Global announced to reach an agreement to acquire UnityMedia GmbH, the second largest cable MSO in Germany. We believe management may pursue further acquisitions in Europe with the cash receipt of the disinvestment in Japan.
In the coming years, we believe, Liberty Global’s earnings will continue to benefit from a “triple play” of video, broadband, and telephone, as it signs up more “bundled” customers in Europe and Latin America. Early indications of its bundled offers in the marketplace are positive — the triple play customer base increased nearly 30% year over year in 2009. The company is also concentrating on “double play” products — Internet and telephony — believed to have potential to expand. “Double play” customer base penetration increased to nearly 20% in 2009.
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