UPC Goes Up Against Permira, Cinven to Buy Polish TV Provider

UPC, the European cable TV arm of John Malone’s Liberty Global, will battle private equity funds Permira and Cinven to buy Poland’s No.3 cable TV provider Multimedia, valued at some 800 million euros ($980 million), Reuters reported Friday. UPC, already Poland’s top player after snapping up the country’s No.4 cable TV firm Aster for 870 million zlotys last year, has led the consolidation of the Polish market.

(Reuters) – UPC, the European cable TV arm of John Malone’s Liberty Global, will battle private equity funds Permira and Cinven to buy Poland’s No.3 cable TV provider Multimedia, valued at some 800 million euros, sources close to the talks said.

“Cinven, Permira and Liberty Global were shortlisted for the second round. It was quite competitive,” a person close to one of the bidders said.

He added Multimedia’s owners – co-chairmen Tomek Ulatowski and Ygal Ozechov, who delisted the group last year – would decide by early September whether to hold further talks with one or more of the bidders.

Multimedia and UPC declined to comment. Permira, Cinven and JP Morgan, which is running the sale, were not immediately available.

UPC, already Poland’s top player after snapping up the country’s No.4 cable TV firm Aster for 870 million zlotys last year, has led the consolidation of the Polish market.

“UPC is more than willing (to snap up Multimedia) because they have the most synergies,” another source close to the deal said.

UPC controls 30 percent of the Polish market with 1.4 million clients and would likely need to shed some parts of Multimedia, as it did with the Aster purchase, to get a green light from the competition watchdog.

Multimedia, which has 700,000 clients, reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 327 million zlotys ($99 million) last year, with a net profit at 102 million.

Poland’s cable market has grown at an average rate of 4 percent annually over the last five years.

The cable sector has seen some of the largest buyout deals of the last two years. Firms homed in on players with steady growth and cash flows, and Liberty Global consolidated its position by picking off companies in private equity hands.

The sector has been one of the hottest for private equity exits since the credit crisis, illustrated by the sales of Germany’s Kabel Baden-Wuerttemberg to Liberty Global and Sweden’s Com Hem to BC Partners, both of which attracted fierce competition from rival groups and other private equity houses.