Liberty Bids on Bonds of European Cable Giant
Liberty Media Corp. offered to buy as much as $1.5 billion worth of United Pan-Europe Communications’ bonds in a move that analysts said is likely to give it control of Europe’s second-biggest cable company for about $300 million.
Englewood, Colo.-based Liberty, which has an agreement to take control of UPC’s parent company, is unlikely to pay more than $300 million because the bonds are trading at less than 20% of face value, said Bala Ramakrishnan, high-yield analyst at Morgan Stanley & Co. Buying the unprofitable company’s bonds may give Liberty the power to force bondholders to accept shares in place of their debt, analysts said.
The offer for the UPC bonds, which expires Nov. 6, depends on Liberty receiving at least 30% of the notes on offer.
Liberty shares were down 34 cents to $11.65 on the New York Stock Exchange.
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