Liberty Global shifting focus in Europe

By Siobhan Kennedy

PARIS (Reuters) - Liberty Global (LBTYA.O: Quote, Profile, Research, Stock Buzz) is a buyer in Eastern Europe, a seller in Sweden and is still mulling its options in France, as the global cable operator focuses on high growth regions.

"I think you're going to find us rebalancing the portfolio a bit, getting out of markets where we're sub-scale, getting into markets where we can achieve scale and in-market consolidation where we think we need to have a bigger presence," Chief Executive Mike Fries said on Wednesday at the Reuters Global Technology, Media and Telecoms summit.

He said Eastern Europe represented an especially good region for Liberty Global because it has not yet been tapped by many cash-rich private equity firms snapping up cable operators across the continent.

"That part of the world represents a great growth opportunity for us because you're getting into these markets early, you're building or rebuilding networks very cost-effectively, the demographics are improving, they all want broadband and the local regulatory environments are very favorable," Fries said

"We'll continue to focus capital in that part of the world," he added at the summit, held in Paris.

The company has a warchest of about $2.5 billion, after spending approximately the same amount over the past nine months on a dozen acquisitions.

Liberty Global, based in Englewood, Colorado, already has 5 million users of its individual services in Eastern Europe and was the largest cable operator in Poland, Hungary, the Czech Republic, Romania and Slovenia, Fries said.

As Liberty Global, part of cable mogul John Malone's media empire, shifts its attention more to Eastern Europe, it is selling its Swedish cable TV operations.

"I can tell you we're pretty confident that transaction will conclude in the near term," Fries said.

He declined to comment on who the buyer was or the price, but sources close to the matter said U.S. private equity firms Carlyle Group and Providence Equity were the front-runners after they bought another Swedish cable firm last year.

The sources declined to comment on the price Carlyle and Providence would pay for UPC Sweden, but other sources said previously the unit would sell for a similar price to the Norwegian business.

Liberty Global sold UPC Norway in November to private equity firm Candover for 450 million euros ($537.5 million).

The imminent deal in Sweden comes amid a flurry of activity by private equity firms in the cable and telecoms sector, particularly in the Nordic region.

Last year a group of private equity firms snapped up Danish telecoms firm TDC for $15.8 billion in the largest ever private equity transaction.

And Carlyle and Providence together acquired Swedish broadband provider ComHem in December for $1.3 billion.  Continued...