Ziggo Plans to Raise $989M From IPO

Dutch cable company Ziggo‘s owners could bank 745 million euros ($989 million) from the sale of a 20% stake this month, in an initial public offering, Reuters reported. The offering, in which no new shares will be sold, will see Ziggo’s majority owners — private equity firms Cinven and Warburg Pincus — selling part of their stakes.

(Reuters) – Dutch cable company Ziggo’s owners could bank 745 million euros ($989 million) from the sale of a 20 percent stake this month, in an initial public offering that could be the biggest European listing since the middle of last year.

 

Ziggo, which said its listing on the NYSE Euronext Amsterdam stock exchange was be the largest IPO in the Netherlands since 2009, is offering shares at 16.50-18.50 euros.

 

The offering, in which no new shares will be sold, will see Ziggo’s majority owners — private equity firms Cinven and Warburg Pincus — selling part of their stakes.

 

Individuals in line for a big pay day include the cable company’s former chief financial officer Walter Blom, who stands to make as much as 1.3 million euros and chairman Andrew Sukawaty, who could raise just under 1 million.

 

Ziggo joins Swiss company DKSH in looking to break a drought in European IPO activity, which has seen companies put their listing plans on ice during market volatility brought on by the euro zone debt crisis, rather than settle for lower pricing.

 

Both companies are due to close the books on their offerings on March 20 and make their market debuts on March 21.

 

“The IPO market is unwinding and getting moving,” said one equity capital markets banker. “Other deals that are ready will be preparing for their start date.”

 

Ziggo said its offering of up to 40.25 million shares, or 20.1 percent of the company, would raise between 664 million euros and 745 million euros, assuming a 15 percent overallotment option is exercised.

 

“TV EVERYWHERE”

 

Ziggo is one of the two main cable operators in the Netherlands providing television and internet services to about half of all Dutch households. Its rival is UPC, owned by Liberty Global.

 

Cable companies in the Netherlands have invested in upgrading their networks and infrastructure over the last few years and have expanded into broadband and telephony.

 

Both Ziggo and UPC have lured customers away from leading telephone operator KPN with their bundled offers of television, high-speed internet and telephony.

 

Last year Ziggo and Sweden’s Tele2 won a Dutch mobile spectrum auction, which will allow them to roll out mobile data networks.

 

It said it intended to drive growth through a “TV Everywhere” strategy offering services across TVs, PCs, tablets and smartphones and continued growth in the provision of broadband internet and telephony services to business customers.

 

Ziggo, which reported revenues of 1.48 billion euros and earnings before interest, tax, depreciation and amortization (EBITDA) of 835 million in 2011, said in its offer prospectus it was targeting a total dividend payout of 220 million euros this year.

 

From 2013 onwards it plans a dividend of at least 50 percent of free cash flow to equity, the company said.

 

Interest from investors during premarketing of the offering was good throughout the indicative price range, a source close to the deal said, with feedback that it was viewed as realistic.

 

J.P. Morgan and Morgan Stanley are the joint global coordinators for Ziggo’s IPO and joint bookrunners along with Deutsche Bank and UBS.

 

ABN AMRO, HSBC, Nomura and Rabobank are acting as joint lead managers and ABN AMRO and Rabobank are the joint retail bookrunners. Societe Generale is co-lead manager.

 

The banks will share fees of 1.5 percent of the offer proceeds, Ziggo said in its prospectus, with a further incentive fee of up to another 1.5 percent available making the total fee pot up to 22.35 million euros. (By Roberta Cowan and Kylie MacLellan)