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Liberty Global Buys Cablecom

About two weeks before it was set to go public, Swiss cable operator Cablecom Holdings AG agreed to be acquired by Liberty Global Inc. in a deal worth about $2.2 billion in cash. Liberty Global will also assume $1.2 billion in Cablecom debt.

Liberty Global said it expects the deal to close in October. The selling shareholders are Apollo Investment Management Ltd., TowerBrook Capital Partners L.P. and affiliates of The Goldman Sachs Group Inc.

According to a press release, the deal price, including the debt assumption, is 10.4 times Cablecom’s expected 2006 cash flow, but below its initial-public-offering range of $2.2 billion-$2.7 billion. The IPO was set for Oct. 13 on the Swiss stock exchange (SWX).

Liberty Global said the deal will be largely financed through debt, including $662 million in structurally subordinated debt secured by Cablecom and a new senior-note offering of $361 million.

Cablecom is the largest cable operator in Switzerland with about 2 million video, voice and data subscribers. The deal will boost Liberty Global’s European subscriber base to about 17 million revenue-generating units.

“With 80% video penetration, limited satellite and data competition and strong operating cash flow, Cablecom fits perfectly into our long-range growth plans,” Liberty Global CEO Mike Fries said in a prepared statement.

Liberty Global was advised by JP Morgan Chase & Co. and UBS Warburg LLC in the transaction.