Liberty Global PLC (LBTYA) filed a Form 8K - Entry Into a
Definitive Agreement - with the U.S Securities and Exchange
Commission on January 27, 2014.
On January 27, 2014, LGE Holdco VII B.V., a private limited
company incorporated under Dutch law (Bidco) and a subsidiary of
Liberty Global plc, a public limited company incorporated under
English law (Liberty Global), Ziggo N.V., a public limited
liability company incorporated under Dutch law (Ziggo) and Liberty
Global, as guarantor, entered into a merger protocol (the Merger
Protocol).
The Merger Protocol provides that, upon the terms of and subject
to the conditions set forth therein, Bidco will make, declare
unconditional and settle a public offer for all shares of Ziggo not
already held by Liberty Global and its affiliates (the Offer). The
Offer will result in Ziggo becoming an indirect subsidiary of
Liberty Global.
Pursuant to the Merger Protocol (subject to customary
anti-dilution adjustment provisions) each ordinary share of Ziggo
issued and outstanding immediately prior to the settlement of the
Offer (excluding shares held by Ziggo or its subsidiaries in
treasury) that is validly tendered and accepted pursuant to the
Offer (subject to the terms and conditions of the Offer) will be
acquired in consideration for (i) 0.2282 Class A ordinary shares of
Liberty Global; (ii) 0.1674 Class C ordinary shares of Liberty
Global (or 0.5630 Class C ordinary shares of Liberty Global after
the completion of Liberty Global's announced stock dividend); and
(iii) 11.00 ($15.05 at the January 27, 2014 exchange rate) in cash,
per share (collectively, the Offer Price).
If Bidco acquires 95% of the Ziggo shares (including those
shares already held by Liberty Global and its affiliates), Bidco
intends to initiate the statutory squeeze-out proceedings to obtain
100% of Ziggo shares. If Bidco acquires less than 95% but at least
80% of Ziggo shares, Bidco intends to acquire the entire business
of Ziggo, at the same price and for the same consideration as the
Offer, pursuant to an asset sale, followed by a liquidation of
Ziggo. This asset sale and liquidation is subject to Ziggo
Extraordinary General Meeting (the EGM) approval. The Ziggo
supervisory and management boards have each agreed to unanimously
recommend that Ziggo shareholders tender into the Offer and vote in
favor of the asset sale and liquidation.
Pursuant to the Merger Protocol, Liberty Global intends to
integrate and align its Dutch business with that of Ziggo to fully
benefit from their combined reach, scale and resources. Pursuant to
the Merger Protocol, the integrated business will be managed by a
single management team. The supervisory board of Ziggo (and, to the
extent combined with Liberty Global's Dutch business, such combined
company) will consist of three members selected by Liberty Global
and two members of the current Ziggo supervisory board. The
management board of each such company will consist of at least four
members, where the CEO and CFO will be selected by Liberty Global
and the other members will be selected in accordance with criteria
agreed in the integration process.
Liberty Global, Bidco and Ziggo have made customary
representations, warranties and covenants in the Merger Protocol,
including, amongst others, covenants to conduct their respective
businesses in the ordinary course, during the period from the date
of the Merger Protocol until the earlier of the termination of the
Merger Protocol or the settlement date of the Offer. During such
period, Ziggo has agreed not to engage in transactions such as
changes to its legal, accounting or fiscal structure; payment of
any dividend; incurrence of indebtedness; and entry, amendment or
termination of material contracts. During such period, Liberty
Global has also agreed not to engage in certain transactions
including distribution of any non-cash assets (subject to certain
exceptions) and investments of a transformative nature.
Furthermore, Liberty Global, Bidco and Ziggo have agreed to certain
covenants in respect of financing, corporate governance,
post-closing measures, strategy, organization, integration,
employees, security and privacy for three years, or two years in
the case of financing covenants, after settlement of the Offer.
In the Merger Protocol, Liberty Global, Bidco, and Ziggo have
committed to use their reasonable best efforts to take, or cause to
be taken, all actions that are reasonably necessary, proper or
advisable to consummate and make effective the Offer and the other
transactions contemplated by the Merger Protocol, subject to the
terms and conditions of the Merger Protocol.
The completion of the Offer is subject to customary closing
conditions, including (without limitation):
* a minimum acceptance level of at least 95% of Ziggo's shares,
which will be reduced to 80% in the event that the asset sale and
liquidation is approved at the EGM (however Liberty Global may
waive the minimum acceptance condition without the consent of Ziggo
if the acceptance level is at least 65%);
* competition clearance having been obtained;
* no material adverse effect having occurred; and
* no revocation, amendment or qualification of the
recommendation by the Ziggo board of directors having been
made.
In addition to customary termination provisions, Liberty Global
and Ziggo may terminate the Merger Protocol in the event that an
independent third party makes an offer which, in the reasonable
opinion of the Ziggo supervisory and management
board, is substantially more beneficial than Liberty Global's
offer, exceeds the Offer Price by 8% and is launched or is
committed to be launched within eight weeks (a Competing Offer). On
termination of the Merger Protocol by Ziggo due to a material
breach of the Merger Protocol by Liberty Global, Liberty Global
will be obligated to pay to Ziggo a 69.5 million ($95.1 million at
the January 27, 2014 exchange rate) reverse termination fee. If the
Merger Protocol is terminated because the competition clearance is
not obtained, Liberty Global will be obligated to pay to Ziggo a
200.0 million ($273.6 million at the January 27, 2014 exchange
rate) reverse termination fee. On termination of the Merger
Protocol by Liberty Global due to (i) a material breach of the
Merger Protocol by Ziggo, (ii) a Competing Offer having been made
or (iii) the revocation or amendment of the recommendation of the
Ziggo board, other than circumstances linked to a decline in
Liberty Global's share price, Ziggo will be obligated to pay to
Liberty Global a 69.5 million termination fee.
The foregoing description of the Merger Protocol and the
transactions contemplated thereby is not complete and is subject to
and qualified in its entirety by reference to the Merger Protocol,
a copy of which is attached hereto as Exhibit 10.1 and the terms of
which are incorporated herein by reference.
The Merger Protocol has been included to provide investors and
security holders with information regarding its terms. It is not
intended to provide any other financial information about Liberty
Global or Ziggo, or their respective subsidiaries and affiliates.
The representations, warranties and covenants contained in the
Merger Protocol were made only for purposes of that agreement and
as of specific dates; were solely for the benefit of the parties to
the Merger Protocol; may be subject to limitations agreed upon by
the parties, including being qualified by confidential disclosures
made for the purposes of allocating contractual risk between the
parties to the Merger Protocol instead of establishing these
matters as facts; and may be subject to standards of materiality
applicable to the contracting parties that differ from those
applicable to investors. The shareholders and other investors of
Liberty Global and Ziggo are not third-party beneficiaries under
the Merger Protocol and should not rely on the representations,
warranties and covenants or any description thereof as
characterizations of the actual state of facts or condition of
Liberty Global and Ziggo, or any of their respective subsidiaries
or affiliates. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change after
the date of the Merger Protocol, which subsequent information may
or may not be fully reflected in public disclosures by Liberty
Global and Ziggo.
The full text of this SEC filing can be retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058514000018/a1-31x2014ziggomergerproto.htm
Any exhibits and associated documents for this SEC filing can be
retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058514000018/0001570585-14-000018-index.htm
Public companies must file a Form 8-K, or current report, with
the SEC generally within four days of any event that could
materially affect a company's financial position or the value of
its shares.
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