Liberty Global agreed to buy Virgin Media in a cash...

Class C stock, they said. The deal puts Virgin Media’s enterprise value at $23.2 billion, or about $47.87 a share, they said. The transaction will create the world’s largest cable operator, adding Virgin’s 4 million video customers to Liberty’s 18 million. The combined entity will pass 47 million homes, mostly in western Europe, and sell at least one product to 25 million households (http://xrl.us/boe8y6). The companies see additional growth prospects in selling mobile phone services, which account for just 14 percent of current Virgin sales and 2 percent of Liberty Global sales. Plus, they said the deal could save both companies $180 million from the buying power that comes with increased scale. Savings could come from the ability to buy cheaper mobile handsets and network equipment, plus increased leverage in programming rights negotiations, Evercore Partners analyst Bryan Kraft wrote in a note to investors. If the transaction closes, current Virgin shareholders will hold about 36 percent of the stock in the new company, representing about 26 percent of the vote, ISI analyst Vijay Jayant wrote in a note to investors. He said he expects the combined company to accelerate share repurchases after the deal closes. Liberty had already announced a $1 billion buyback plan for 2013 and Virgin said it would buy back up to $1.75 billion a year for two years after closing. A law firm in New York said it was recruiting Virgin Media shareholders as plaintiffs to potentially sue the company’s board over the deal. The firm of Levi & Korsinsky said it will investigate whether Virgin’s board breached its fiduciary duty to shareholders by not shopping the company around to other potential buyers before agreeing to sell to Liberty.