FILE PHOTO – A logo of internet and TV operator UPC Cablecom, owned by Liberty Global, is pictured in Renens, Switzerland November 30, 2017. REUTERS/Denis Balibouse
BARCELONA (Reuters) – Cable operator Liberty Global (LBTYA.O) is investing to strengthen its Swiss UPC video offering so it could stand alone if a strategic partner isn’t found, CFO Charlie Bracken said on Thursday.
Liberty is looking to divest assets where it does not see a profitable way into mobile markets. It has sold its Austrian unit to Deutsche Telekom (DTEGn.DE), while the $21.8 billion sale of its operations in Germany and Central Europe to Vodafone (VOD.L) is being reviewed by regulators.
In Switzerland, there has been persistent speculation that UPC would merge with Sunrise Communications (SRCG.S), whose German anchor investor Freenet (FNTGn.DE) has said it is also open to offers to sell its stake.
“We’re not desperate, that’s really important,” Bracken said at the Morgan Stanley Technology, Media and Telecoms Conference in Barcelona.
Bracken saw the opportunity for strategic rationalization on the Swiss market but in the meantime UPC was reinvesting capital to strengthen its Swiss video content offering, which has been identified as a weakness.
UPC also ran a virtual mobile network in Switzerland, meaning it could compete as a converged fixed-to-mobile player.
“It’s not like we have to do a deal on any terms,” he said. “We’re ready to stand alone if we have to, and can stand alone.”
More broadly, Liberty, founded by U.S. investor John Malone, isn’t in takeover mode. The multiple on offer in the Vodafone deal, at 12 times enterprise value, was such that it was better to take the money off the table and put it to work elsewhere, said Bracken.
“We feel strategically complete, there are no acquisitions that we need to do,” said Bracken. He said Liberty was comfortable with continuing to run leverage of four to five times, but may tend towards the lower end of that range in future.
Reporting by Douglas Busvine, editing by Tassilo Hummel and Elaine Hardcastle