Ziggo NV (AMS:ZIGGO) (OTCMKTS:ZIGGY) has rejected a bid from John Malone’s Liberty Global, calling it “inadequate” and saying that they aren’t sure if another, higher bid will be forthcoming, reports Amy Thomson for Bloomberg. Ziggo’s stock price went up 6.7 percent following the announcement, its biggest gain in the last six months.

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Liberty Global’s stakes in Ziggo

Liberty Global, which owns 28.5 percent of Ziggo NV (AMS:ZIGGO) (OTCMKTS:ZIGGY), bought Virgin Media Inc. (NASDAQ:VMED) (LON:VMED) earlier this year for $16 billion and made an offer on Kabel Deutschland Holding AG (OTCMKTS:KBDHF) (ETR:KD8) (FRA:KD8), though it was outbid by Vodafone Group Plc (NASDAQ:VOD) (LON:VOD). Most people see the Ziggo bid as part of a larger strategy to expand into European markets. Liberty Global initially bought a 12.7 percent stake from Barclays PLC (NYSE:BCS) (LON:BARC) in May and then increased its holdings in July. It is reported that the group wanted to buy Ziggo outright with its latest bid. Liberty Global already has a presence in The Netherlands through UPC Broadband Holding BV.

Goldman Sachs analyst Tim Boddy recently downgraded Liberty Global over concerns about Virgin Media Inc. (NASDAQ:VMED) (LON:VMED), reports Dwight Einhorn for Benzinga. “We remove Liberty Global from our Conviction List – Buy to reflect ongoing near-term pressures in turning around the Virgin Media Business and a modest growth slowdown in 2015/16E in Germany given likely higher regulatory concessions at KBW, and now see opportunities with greater potential upside elsewhere in our coverage universe.”

Ziggo and Virgin Media to benefit from growth

With most people expecting Eurozone growth to start picking up next year, Liberty Global’s decision to increase exposure is a natural move. Companies like Virgin Media Inc. (NASDAQ:VMED) (LON:VMED), which is highly branded, and Ziggo NV (AMS:ZIGGO) (OTCMKTS:ZIGGY) with its built-in subscriber base, are well positioned to benefit from this growth even if it doesn’t happen in the next year. Liberty Global’s share price ticked up slightly after the news, but the change is too small to read much into it.

The product of a merger between multiple Dutch rivals, Ziggo NV (AMS:ZIGGO) (OTCMKTS:ZIGGY) is the largest cable company in The Netherlands with 2.8 million subscribers. Ziggo will be under new management next year when Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE)’s Rene Obermann become CEO. It was first listed in Amsterdam in 2012 and currently has a market cap of €6.2 billion ($8.4 billion).