Liberty Global is to sell its 37.8 per cent stake in Japanese cable TV network operator Jupiter Telecommunications Co (J:Com) for 361.66 billion yen.
Japan's second-biggest mobile-phone operator KDDI is paying the cable company controlled by billionaire John Malone about 140,000 yen for each Jupiter share, 44 per cent more than Jupiter's closing share price today.
KDDI is seeking an edge against Japan's former monopoly Nippon Telegraph and Telephone Corp, and has been trying to make inroads into cable TV through its subsidiary Japan Cable Net Ltd to raise sales of its sluggish fixed line business.
The investment allows it to reach as many as 3.3 million potential households for phone services without renting rival Nippon Telegraph & Telephone's fixed-line networks, KDDI president Tadashi Onodera said. Exiting Japan allows Liberty to focus on its operations in Europe, Latin America and Australia.
Liberty owns Irish cable firm Chorus/NTL.
The offer values Jupiter at 25 times 2010 earnings estimated at Bank of America. By comparison, Starcat Cable Network, covering about 957,000 households in the area around Nagoya city, central Japan, is trading at nine times the earnings it forecasts for the year ending March 31st.
KDDI fell 2 per cent to close at 528,000 yen on the Tokyo Stock Exchange, before the statement. The benchmark Nikkei 225 Stock Average retreated 0.7 per cent. Jupiter surged 15 per cent, or the most in almost five years, to 97,000 yen at the 3.10pm close on the Jasdaq Securities Exchange after the acquisition was announced.
KDDI, which also competes with NTT DoCoMo Inc and Softbank Corp in mobile phones, said that its operating profit dipped 12.5 per cent to 125.83 billion yen in October-December as both its mobile phone and fixed line revenues slipped.
Shares in KDDI closed down 2 per cent, while shares of J:Com jumped 14.4 per cent.
Agencies