Nordic Capital Drops Bid For Sweden's Com Hem - Sources

Date : 07/14/2011 @ 9:18AM
Source : Dow Jones News
Stock : Liberty Global Plc - Class B Ordinary Shares (MM) (LBTYB)
Quote : 31.65  0.0 (0.00%) @ 4:00PM

Nordic Capital Drops Bid For Sweden's Com Hem - Sources

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Swedish private equity firm Nordic Capital has dropped out of the bidding process for Swedish cable operator Com Hem, people familiar with the situation told Dow Jones Newswires Thursday.

Nordic Capital had been planning to submit a joint bid with Cinven Group, but decided to pull out of the process due to disagreements on price, one person said. Earlier this month, CVC Capital Partners also withdrew from the process.

Cinven is currently reviewing whether to submit a bid on its own following Nordic Capital's exit, one person said. BC Partners still intends to put in a second round bid, another person said.

The buyout outlook has turned more uncertain recently as the euro-zone debt crisis weighs on private equity buyers' ability to raise acquisition finance.

The auction of Com Hem is being run by Deutsche Bank AG (DB) and Morgan Stanley (MS).

Com Hem is owned by private equity firms Carlyle Group and Providence Equity Partners, which bought the Stockholm-based cable operator in January 2006 for around $1.2 billion. In June that year, the buyout duo merged the company with UPC Sweden which they bought from John Malone's Liberty Global Inc. (LBTYA) for $427 billion.

Com Hem had earnings before interest, taxes, depreciation and amortization, or Ebitda, of 1.85 billion Swedish kronor ($294.4 million) in 2010, an increase of 13% on the previous year and boosted by a fourth-quarter rise of 32% compared with the same period in 2009.

Last year, Com Hem invested SEK680 million to develop infrastructure and services and by year end had 840,600 digital TV, broadband and telephone subscribers.

Although its owners are currently running a sale process, the company hasn't ruled out an initial public offering.

It is unclear exactly what value the owners put on the business, but earlier this year Swedish private equity company EQT announced the sale of German cable operator Kabel Baden-Wuerttemberg GmbH & Co. KG (KD8.XE) to Liberty Global for EUR3.16 billion, representing an Ebitda multiple of 8.1 on forecast 2011 earnings. A similar multiple on a trailing basis would value Com Hem at around SEK15 billion ($2.39 billion).

-By Jens Hansegard and Marietta Cauchi, Dow Jones Newswires; +46 8 545 130 95; jens.hansegard@dowjones.com

(Anna Molin contributed to this article.)

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