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Cinven, Warburg Pincus sell more shares in Ziggo

by Renee Cordes | Published July 31, 2012 at 9:01 AM

Buyout shops Cinven Ltd. and Warburg Pincus LLC said Tuesday, July 31, that they will receive €681.5 million ($835.69 million) in gross proceeds from Monday's placement of 29 million shares in Ziggo NV.

The companies said they sold the shares in the Dutch cable operator at €23.50 a piece after increasing the size of the offering by 11 million shares because of strong demand.

An over-allotment option could increase the placement by up to 3 million shares. Final allocations are due to take place Tuesday, with settlement on or about Aug. 3.

After completing the transaction, the private equity companies and their co-investors will own a combined 116.8 million shares in Ziggo, equivalent to a 58.4% stake. Both Cinven and Warburg Pincus made €255 million from Monday's placement excluding the greenshoe, and each will retain a stake of about 22% of Ziggo.

"This placing demonstrates the high level of institutional support for the stock and the company's successful growth strategy," said Joseph Schull, head of Warburg Pincus in Europe. "We remain supportive shareholders in the company and look forward to working with management to build on its successful track record."

Cinven said that following the listing in March and the sale of 10.8 million shares, Ziggo will have generated total proceeds of €569 million for Cinven's fourth fund and a total money multiple of 2.7 times, including Cinven's remaining 22% shareholding in the company. Warburg said it's made €590 million in total before fees.

The companies took Ziggo public in a March IPO on the Euronext Amsterdam exchange, which raised no new proceeds for the company. The IPO was the first in Amsterdam in more than two years and Europe's biggest since Spain's Bankia SA raised more than €3 billion in July 2011.

On Tuesday in Amsterdam, Ziggo shares were down 3.5% in early afternoon trading just below €23.89, putting its total market value at about €4.78 billion.

Ziggo was established in 2007 from the merger of @Home, Casema NV and Multikabel NV, three of the four largest cable operators in the Netherlands. It began doing business as Ziggo in 2008. However, the private equity firms' involvement in the platform goes back further.

Warburg Pincus first bought Multikabel in late 2005 for €515 million. The following summer it joined Cinven in the acquisition and merger of Essent Kabelcom NV and Casema, respectively the No. 2 and No. 3 players in the Dutch market, for a total of €3.8 billion.

Since 2006, capital expenditure to upgrade the network and introduce new digital TV, high-speed broadband and bundled product offerings to customers has amounted to about €1 billion.

J.P. Morgan Securities plc and Morgan Stanley are joint global coordinators and joint bookrunners. Deutsche Bank AG, Nomura International plc and UBS Ltd. are also joint bookrunners.

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Cinven, Warburg Pincus sell more shares in Ziggo

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