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Callahan buys Telenet stake
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February 22, 2001: 3:46 p.m. ET
U.S. investment firm acquires 54.2% of Belgian communications firm for $1.68B
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NEW YORK (CNNfn) - Callahan Associates International LLC, a U.S. investment firm, agreed Thursday to buy a 54.2 percent stake in Belgian communications firm Telenet Holding N.V.
The purchase values Telenet at $1.68 billion. Telenet also agreed to issue warrants giving Callahan the right to increase its stake by 19.9 percent at the same valuation, Telenet said.
No other financial terms were disclosed.
Telenet provides telephone, Internet and multimedia services to the Flanders region of Belgium, which represents 6 million inhabitants. Callahan Associates, based in Westport, Conn., and in Denver, is an investment firm that focuses on information, communications and entertainment markets.
Callahan so far has raised  10 billion to invest in European broadband companies. The Telenet stake will expand Callahan's cable businesses across five western European markets.
Telenet's current shareholders will hold a total of 45.8 percent in the new company, with the intermunicipalities owning 13.95 percent, and pure municipalities holding 7.42 percent. Belgian investment company GIMV will hold 12.21 percent and a financial consortium will own 12.21 percent.
Interactive digital TV
Callahan also offered to buy 53.5 percent of Telenet's cable TV activities, owned by 10 intermunicipalities, and valued at 934 million. Telenet's board will decide within 10 days and the city councils will decide no later than early June, after which the offer will expire, Telenet said.
If the deal is approved, Telenet plans to launch interactive digital TV in Flanders by 2002.
GIMV, which is 70 percent-owned by the regional government of northern Belgium's Flanders region, said it will realize a capital gain of 187 million in 2001 on the sale of its current 26 percent stake in Telenet. GIMV said it is selling its stake for 391 million, including 109 million cash, 195 million of notes issued by Callahan, and a 12 percent stake in the new Telenet company. In February 2000, GIMV said its Telenet stake then was conservatively valued at 239 million.
-- from staff and wire reports 
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