Liberty Global snaps up CWC
Liberty Global Plc, the European cable and wireless operator controlled by John Malone, agreed on Monday to buy the British telecommunications company Cable & Wireless Communications Plc for $5.5 billion.
The move follows an announcement last month that the companies were in discussions about a potential takeover that would expand Liberty Global’s presence across the Caribbean and Latin America.
Under the terms of the deal, Liberty Global said it had offered $1.32 for each Cable & Wireless share, including a onetime 4.5 cent dividend that would be paid once the transaction closed.
The deal represents a premium of roughly 50% on Cable & Wireless’ stock price before the potential takeover talks were disclosed in October.
The acquisition of Cable & Wireless, which traces its roots to 1852, “will add significant scale and management depth to our fast-growing operations in Latin America and the Caribbean,” Liberty Global’s chief executive, Michael Fries, said in a statement on Monday.
Including Cable & Wireless’s outstanding debt, the deal is valued at $8.2 billion.
Cable & Wireless’s operations include television, broadband, mobile and land line telephone services in the Caribbean, Panama and the Seychelles.
The acquisition represents a change for Liberty Global after the company acquired several telecommunications operators across Europe.
Those deals combined have been worth tens of billions of dollars, and included acquisition of Virgin Media Plc, a British cable operator, and Ziggo, a Dutch telecommunications provider.
Liberty Global also held early-stage talks with Vodafone Group Plc, the British wireless giant, over a potential asset swap, though both companies announced recently that the discussions had not led to a deal.
Yet as European regulators increasingly frowned on further consolidation in the region’s telecom sector, Liberty Global shifted some of its focus to Latin America and the Caribbean.
In the summer, for example, Liberty Global created a new tracking stock called LiLAC to “exploit organic growth potential” for its operations in Latin America and the Caribbean.
The company said on Monday that it had “growing ambitions” in the region, and would use Cable & Wireless’ services to expand further there.
Malone has a 13% voting stake in Cable & Wireless. That ownership came through an earlier deal in which Cable & Wireless paid about $1.9 billion in cash and stock for Columbus International, which was partly owned by Malone.