Monday 19 February 2018

Hard-headed Darth Vader of deals looks to Irish hospitality

John Malone, the Irish American billionaire telecoms investor and horse-mad chair of Liberty Global is on a buying spree in Europe – and he's buying Irish

John Malone illustration by Don Berkeley
John Malone illustration by Don Berkeley

Roisin Burke

'I'M not very social," drawls John Malone in a voice like maple syrup poured over gravel, sounding so warmly congenial it is difficult to credit his reputation as a ruthless dealmaker – a man described by Al Gore as "Darth Vader", and elsewhere as lying in wait like a swamp alligator to pounce on businesses.

At 73, has he's mellowed?

He tells me he is "old and forgetful", but the word on the street is that he's whip smart and as canny as ever.

He's calling from his office at his 2,100-acre Colorado ranch farm and our conversation is peppered with references to land: the stud farm in Florida, the ranch in Maine, another in New Mexico, the island in the Bahamas.

But a vast Colorado property south-east of Denver is where Malone calls home. At the height of his career, in the throes of titanic clashes over deals, he famously drove back there every day at midday to have lunch with his wife, Leslie. His conversation is peppered with references to her too. He and his wife are "country type folks" he says, in a down home patter that belies his Yale degree and Johns Hopkins doctorate, his time as a McKinsey troubleshooter and his terrifying deal quest reputation.

Oh, and the fact that by Forbes's estimate he's worth €5bn, and that at one point his company controlled one in every four cable set top boxes in every living room across America. And that he is both a friend and main adversary in Europe to media mogul Rupert Murdoch.

Dubbed the 'cable king' or 'cable cowboy', Malone chairs and controls a chunk of Liberty Global, the gigantic media conglomerate he built, which owns UPC in Ireland and has splurged over €50bn in Europe to control TV, cable and wireless assets rivalling Murdoch's BSkyB in the teeth of what Malone calls a tectonic shift of convergence in the whole media landscape.

His Irish connections are far in the distance, but deeply felt. Two Malone brothers left Cork in 1840 for the US. His ancestor settled on the East Coast and married there while the brother headed into the American West, never to be heard of again. In conversation, the famously unemotional Malone is clearly affected to the core by this past.

The tycoon has been much more avidly chasing Irish acquisitions than first realised, it emerges as we talk. His investment team bid on one of the most prized buildings in Dublin, the €65m Google headquarters in the silicon docks, and on other big commercial property plays. "We've bid on pretty much everything of quality," he said.

Mount Juliet, the new-to-market 1,500-acre golf resort that was a favourite retreat for the Anglo boys during the boom – and in which rival tycoons like Denis O'Brien are said to be interested – is on his radar. Mount Juliet has prospects as a stud farm also, which caught Malone's attention. "We are quite interested in the horse world so it might be of interest for us from that perspective."

His focus in Ireland is mainly on hospitality, as prestige office values look increasingly toppy versus returns, he thinks. "I'm not going to say there's a bubble, but clearly the valuations now kind of show the low cost of debt financing reflected in the asking prices. There are still some attractive opportunities but there are no flat out bargains."

So urban hotels are a main focus. "We will be taking a pretty good look at anything in Dublin and then anything else that would seem to be large enough to perhaps represent a decent economic investment."

He already owns the Trinity Capital Hotel (now called the Trinity City Hotel), bought for around €34m, and the Hilton in south Dublin city, bought for €30m.

"We kind of love Ireland and we're looking for opportunities to make some investments in the country."

Then there's Humewood, where the hard-headed "Darth Vader" of deals claims to be led by his heart. The neo-Gothic Victorian castle and 500-acre estate in Co Wicklow was snapped up by Malone for one-third of what his Irish investment partner John Lally paid for it at €8m, and he is lavishly restoring it for use as his family base in Ireland.

"Our motives are primarily preservationist. It's a labour of love," he says.

Like Russian oligarch Elena Baturina, he is interested in acquiring agricultural land in Ireland.

Malone has outflanked his rival media magnate Ted Turner to become America's biggest private landowner, owning over 2 million acres. He has previously suggested that his compulsion for land is a legacy of his famine-era landlord- blighted Irish roots.

In the US, a lot of Malone's philanthropic interests involve buying and preserving swathes of land through a private foundation, funded with hundreds of millions of dollars, to protect them from development – something he would like to do in Ireland also.

"Hopefully next year, in 2015, we'll be able to come over and base ourselves there and travel around a bit, meet some people, have those kinds of discussions. We don't know enough yet about those opportunities in Ireland where you can make a long-term difference by making an investment. So it's a learning curve I think."

He and his wife are absolutely mad about horses, and plan to acquire a stud farm in Ireland – which might be where Mount Juliet comes in. "One of our passions is thoroughbreds, so we might get involved in that business there personally as opposed to corporately," he said.

"We were hoping that that would be a great way to spend some time once we get over there. We've visited the Coolmore folks [John Magnier's famous stud farm] and we've been at Kildangan [the Dubai-ruling Maktoum's stud]. We had a couple of racehorses with Dermot Weld for a while. That was just for fun, it wasn't a serious effort. We've had some dabbling; it's a hobby."

Actually, it's a little more than a hobby. Last year he and his wife bought a stud farm in Florida, where they train 140 horses, which attracted a lot of Irish breeder interest and contacts.

"And we have partnerships in Kentucky and in Germany where we own, breed and raise performance horses.

"For me it's about the beauty of the land and watching horses out on the land – that's poetry, right? I very much like to be out on the countryside with the horses and the cattle."

Meanwhile, back off the ranch, Liberty Global and connected companies that own Discovery Channel, part of TripAdvisor and the QVC shopping channel have been rampaging across Europe buying billions' worth of stuff.

Liberty gave serious consideration to buying O2 Ireland from Telefonica. Does he think Three Mobile owner Hutchison Whampoa has got value on that at €850m?

"We looked at that one pretty closely and I guess we didn't end up with it, which meant that we must have thought that the price was a little high," Malone says.

Telefonica was appealing because its mobile phone network was one more service that could be bundled with UPC's offering.

In Ireland UPC has signed a deal to piggyback on Three Mobile owner Hutchison Whampoa's network to offer customers mobile phone services through a mobile virtual network operator agreement, but it's expected to get into mobile here much more deeply than that.

More serious play in the mobile market could be through Vodafone in Ireland. In Europe, Vodafone has spent €18bn lately on TV stations and cable companies, and Malone sees the opportunity for "synergies".

Cash-rich Vodafone has even been suggested as a possible acquirer of UPC, which Malone has no comment on.

"We do have a close working relationship with those guys. They have been buying terrestrial [TV] assets, but we actually see a lot of synergies between the wireless and the wired world."

Liberty recently bought the Richard Branson-founded Virgin Media, a mobile internet and TV company in Britain. "Virgin ... put us into the wireless world in the UK with a good brand."

Has Vodafone knocked on UPC's door? "We've had a number of meetings with Vodafone looking at collaborative things. They are obviously in the space that we're in recently. Whether it would ever be any combination that made sense, who knows. But we certainly know those guys and know there is a lot of synergy between what we do and what they do. We certainly play to a large extent in the same sandbox."

Irish telco Eircom also caught Liberty's attention as it seeks its way out of its remaining debt by considering a stock exchange float, but not wholly ruling out a trade sale.

"I'm sure our people at Liberty would be well aware of that. I think the issue would be from a regulatory point of view: would it work for a cable company to essentially buy the wireless network and declining telecom company."

He says Liberty's buying spree in Europe will continue. It and sister company Discovery recently acquired the British TV production company that makes The Only Way is Essex and Midsomer Murders, All Three Media in Britain and cable company Ziggo in the Netherlands.

Television content makers and TV and broadcasting platforms are a key focus.

"We're kicking a lot of tyres in our various companies in the tectonic shifts that are taking place in how programming is created and distributed. So you could probably expect to see more announcement of investments in that kind of direction."

On what, if anything, in the Irish arena, he won't be drawn. TV3? It's possibly too tiny in Liberty's multibillion asset buying sphere. Liberty recently bowed out of buying Richard Desmond's Big Brother-owning Channel 5 for close to €700m because, "We couldn't quite get to the economics there," he says.

"Broadcasting advancement is part of our distribution strategy. But of course that's very subject to the regulatory policy country by country."

Liberty also has a stake in O2 Dublin venue-owning entertainment giant, Live Nation.

Away from the fray of all that, Malone spends time horseriding, hunting and fishing and loves being on the water. At his boatyard in Maine there are "lots of toys" – including a beloved 80ft power boat designed by his wife and a naval architect. Then there is the legendary campervan, which Malone says is actually a 44ft customised coach the size of a Greyhound bus.

"When we took our family on their first visit to Europe – actually our first visit to Ireland in the Concorde – it blew one of its engines just after leaving New York. We had one of those really white-knuckle experiences landing in Shannon." A nervous flyer already, that put paid to his wife's willingness to board planes.

"She wouldn't get in a plane and we travelled around the US for years in a bus, sometimes with as many as nine dogs, two cats," he laughs.

Happily she eventually got over her fears and now they travel either in Liberty's personal corporate fleet, usually by Falcon 7X if it's business, or a Global 6000 private jet for personal trips. And naturally they have a few smaller float planes for getting around Florida and the Bahamas.

But he lives a quiet life, he says again. "I'm not very social, we really like to do our own thing."

No kicking 42-year barbershop habit

If I weren't doing what I do, I would be ... "Doing something else."

The last meal I really enjoyed was ... "Last night."

If I didn't live in Colorado, the place I'd live in is ... "Probably in Maine."

My greatest indulgence is ... "Private air travel."

My favourite website is ... "Yahoo Finance."

The one artist whose work I would collect if I could is ... "Andrew Wyeth."

The best gift I've given recently was ... "Lego – to my three-year-old grandson."

The people I rely on for personal grooming are ... "I've used the same barbershop for 42 years. I won't change now."

My favourite piece of clothing is ... "My bathing suit."

An unforgettable place I've travelled to in the last year is ... "Sampson Cay, Exuma, Bahamas."

The last music I downloaded was ... "Buddy Holly."

The book on my bedside table is ... "How To Keep Your Brain Young."

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