Liberty Global mulls E.European buys

By Kenneth Li and Yinka Adegoke

NEW YORK (Reuters) - International cable company Liberty Global (LBTYA.O: Quote, Profile, Research, Stock Buzz) said on Wednesday it sees a possible rebound in the credit markets as soon as the second half of the year, creating opportunities for it to pursue acquisitions in Central and Eastern Europe.

Liberty Global Chief Executive Mike Fries said the company is interested in buying more cable systems in high growth markets where it currently operates -- especially Poland -- but has been unable to do so due to the global credit crunch.

"I would say next nine to 12 months certainly things will start to move -- six to 12 months," said Fries, speaking at the Reuters Global Technology, Media and Telecoms Summit.

"But it could be in the second half of the year if the markets change from where they are today."

A liberal regulatory attitude toward cable and lower cable penetration for some video products compared to the United States, has inspired an aggressive expansion by Liberty Global in parts of Europe and Japan.

The company operates in 15 countries including: Japan, Chile, Australia, Switzerland and Poland.

Expansion may focus on one region.

"It's all about Europe. Central and Eastern Europe would be a starting point for us, because these are high-growth markets," Fries said. "Poland for us grows 30 percent in EBITDA (earnings before interest, tax, depreciation and amortization) per quarter. We'd love to own more Poland."

Liberty Global was created from the combination of cable pioneer John Malone's Liberty Media International and UnitedGlobalCom in 2005.

The company's strategy mirrors that of Malone's time-honored tradition of aggressive expansion and the marriage of programming assets and distribution.

Liberty Global, owner of about 65 cable networks, generates about 5 percent of its annual revenue, or about $1 billion, from content.

"We intend to invest in content in a relatively surgical basis," said Fries, adding that, unlike in the United States, content in the regions where it operates are harder to export due to language differences. "We're going to continue being tactical."

Fries also said Germany was shaping up to be a vibrant market for cable operators, seeing it as a period of investment and consolidating, but said nothing was for sale. Rupert Murdoch's News Corp has steadily purchased about a quarter of German pay television operator Premiere AG (PREGn.DE: Quote, Profile, Research, Stock Buzz) over the past year.

Liberty Global has been linked to the auction of UK cable operator Virgin Media, but Fries said, "It's not something we are currently looking at." The market, where Murdoch's BSkyB (BSY.L: Quote, Profile, Research, Stock Buzz) satellite service dominates, is seen as less attractive to the company.

Fries said the company will continue to spend its cash on buying back its stock while there are few merger opportunities but said the company is not looking to go private.  Continued...