Virgin Media Inc. (VMED), Comcast Corporation (CMCSA): The Formation of the World’s Leading Cable Company

Interestingly, Dan Loeb commented that the position in Virgin Media would give him more exposure to Liberty Global “at a material discount to its pre-announcement and pro-forma trading levels.” He thought that Liberty Global could generate more than $6 per share of free cash flow in fiscal 2013 when the buyback was factored in. He wrote, “We believe the shares could trade toward 15x pro forma 2014 free cash flow per share and compound at ~20% per year following the closing.”

My Foolish take

Indeed, with the huge economies of scales, the global leader in the cable business, the geographical focus and the attractive financial fundamentals, the combination of Liberty Global and Virgin Media could be quite an attractive opportunity for shareholders in the long run.

The article The Formation of the World’s Leading Cable Company originally appeared on Fool.com and is written by Anh HOANG.

Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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