Glenview Capital adds to position in Liberty Global
Highlights of Glenview Capital's third quarter 13F filing (Part 7 of 10)
Glenview Capital and Liberty Global
Glenview Capital Management added to its position in Liberty Global Plc (LBTYA) in the third quarter. Currently, the position accounts for 1.73% of the fund’s total portfolio. The fund added 2,732,145 shares to its existing holding during the quarter.
Overview of Liberty Global
LBTYA is an international provider of video, broadband Internet, fixed-line telephony, and mobile services. It has consolidated operations across 14 countries. Through Virgin Media Inc., Unitymedia KabelBW GmbH, and Telenet Group Holding NV, the company provides video, broadband Internet, fixed-line telephony, and mobile services in the United Kingdom, Germany, and Belgium.
Through UPC Holding B.V., the company provides video, broadband Internet, and fixed-line telephony services in nine European countries. It also provides mobile services in four European countries. In Chile, it provides video, broadband internet, and fixed-line telephony services through VTR GlobalCom. It provides mobile services through VTR Wireless.
Plans tracking stock for Latin America and the Caribbean operations
In October, LBTYA decided to establish a tracking stock for its operations in Latin America and the Caribbean—the LiLAC Group. The move intended to highlight the value of its operations in the region. It would create attractive “pure-play” equities for investors.
Expansion through acquisitions
LBTYA has been expanding through acquisitions, especially in Europe. Recently, it agreed to acquire 100% of the parent of Puerto Rico Cable Acquisition Company, Inc. It’s also known as Choice Cable TV, or Choice. It’s the second largest cable and broadband services provider in Puerto Rico .
A release on the deal said post completion, its network will reach over 80% of Puerto Rican homes. The combined business will serve more than 700,000 RGUs (revenue generating units). It will generate over $380 million in annual revenue. The transaction values Choice at an enterprise value of ~$272.5 million—before transaction costs.
Speculations of takeover by Vodafone
Lately, LBTYA has seen speculations that Vodafone could look at merging with the company. The rumors surfaced after the United Kingdom’s telecoms giant BT Group Plc disclosed discussions to takeover either Telefonica SA’s O2 unit or EE—the wireless carrier co-owned by Orange SA and Deutsche Telekom AG.
Swings to profit in 3Q14
For 3Q14, LBTYA posted net earnings of $157 million or $0.20 per basic and diluted share—compared to loss of $172 million or $0.21 per basic and diluted share. Revenue increased 5% to $4.5 billion for 3Q14 and 36% to $13.6 billion for the nine months ending in September 2014. It said the increase was mainly driven by the inclusion of Virgin Media. To a lesser extent, it was driven by organic growth, net positive FX movements, and small acquisitions.
During 3Q14, the company’s subscriber base grew by a “record” of 344,000 organic RGU additions.
The company said it will resume buybacks. It expects to repurchase ~$2.6 billion of stock over the next 14 months.
Glenview’s positions in 3Q14
The fund added new positions in Actavis (ACT), Danaher Corp. (DHR), Realogy Holdings Corp. (RLGY), and 21st Century Fox (FOXA). Its top exit was Walgreens (WAG). It raised stakes in Pentair Plc (PNR), Liberty Global Plc (LBTYA), Endo International Plc (ENDP), and Fidelity National Financial (FNF).
The next part of this series will highlight the fund’s position change in ENDP.
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