Liberty Global Shares Rise on Deal Speculation

Liberty Global shares rose nearly 4% ($3 each) in early trading Thursday, after Macquarie Equities media analyst Amy Yong speculated the international cable giant could be a target of global phone power Vodafone.

Liberty shares were up as much as 3.9% ($3 per share) Thursday to $79.14 each, before closing at $78.59, up 3.2% or $2.45 per share.

In a research note Thursday, Yong speculated that Vodafone, which is in talks to sell its 45% stake in Verizon Wireless back to Verizon Communications for as much as $130 billion,  could use some of that cash in a deal for Liberty Global.

This isn’t the first time the two international communications giants’ paths have crossed – in June Vodafone outbid Liberty Global for German cable power Kabel Deutschland, offering about $10 billion for the largest MSO in that country.  According to Yong, Vodafone’s thirst for cable assets could lead it to the negotiating table with Liberty Global.

“Given the need for scale and scarcity of European cable assets, there are likely significant synergies in a Vodafone-Liberty Global combination,” Yong wrote.

Liberty Global also has been dipping its toes in the wireless telephony market – it has been launching MVNO partnerships across Europe to provide its customers with a “quad-play” wireless product to go with video, data and landline voice – and could seek out a similar deal with Vodafone, short of an outright merger. Vodafone, one of the largest wireless carriers in the world with more than 403 million customers and operations in 30 countries, would be an attractive partner.

Liberty Global is the largest cable operator in Europe with 25 million customers in 14 countries, including 12 in Europe. It has been on an acquisitions tear of its own of late, agreeing in February to acquire U.K. cable company Virgin Media in a deal valued at about $24 billion. That deal was closed in June.

Liberty Global officials did not immediately return a request for comment.