The Wall Street Journal
New York, New York
17 November 2015
Liberty Global to Buy Cable & Wireless Communications for $5.3 Billion
Move strengthens foothold in an emerging market ripe for consolidation
By Shalini Ramachandran
Cable tycoon John Malone’s Liberty Global PLC agreed to buy Caribbean cable operator Cable & Wireless Communications PLC for $5.3 billion, strengthening the acquisitive company’s foothold in an emerging market ripe for additional consolidation.
The companies said in a statement on Monday that the stock offer is valued at 78.04 pence ($1.19) a share—a 6% premium to Cable & Wireless’s Monday closing price in London, where it trades.
The deal also includes a special dividend of three pence a share that will be paid when the transaction closes, bringing the total consideration to 81.04 pence a share. Liberty Global said the full offer represents a 40% premium to Cable & Wireless’s closing share price on Oct. 21, the day before The Wall Street Journal first reported that the companies were in talks. Including net debt, the deal is valued at $8 billion.
Liberty Global Chief Executive Mike Fries in an interview on Monday touted the deal as a “unique platform to start looking at additional consolidation” of cable assets in the Latin American and Caribbean region, which he described as “fragmented” and “underpenetrated.” He also highlighted Cable & Wireless’s valuable and sprawling network of undersea cables in the region, which would allow Liberty Global to capitalize on rapidly increasing broadband data consumption.
Cable & Wireless, which has more than six million subscribers, offers pay-television, Internet, landline phone and wireless service—the so-called “quad play”—in the Caribbean, Panama, Monaco and the Seychelles, according to its website. Liberty Global executives have been focused on the need to offer a “quad play” eventually in all the company’s territories, which stretch across Europe, Latin America and the Caribbean. The combined company will have 10 million subscribers in the Caribbean and Latin America.
The pending deal, which offers Cable & Wireless shareholders a mix of Liberty shares, is subject to regulatory approval by different government entities in the Caribbean. The companies expect the transaction to close next year.
Recently Liberty Global created a separate tracking stock dubbed LiLAC for its Latin American and Caribbean holdings, which also include cable companies in Puerto Rico and Chile. The stock has dropped since its debut in July, though it has rebounded somewhat since the Journal reported on the talks. Cable & Wireless will be attributed to the LiLAC stock.
Liberty Global is offering Cable & Wireless shareholders three options to take different mixes of Liberty Global and LiLAC stock. Cable & Wireless’s board is recommending that shareholders accept the offer that doesn’t include LiLAC stock, according to a statement from the company. That offer is valued at roughly 87 pence, including the special dividend. The other offers available to Cable & Wireless shareholders would require investors to take on more risk in betting on LiLAC’s upside.
The deal will personally benefit Mr. Malone, Liberty Global’s chairman and largest voting shareholder with a 24% stake. About a year ago, Cable & Wireless struck a deal to buy Columbus International Inc., in which Mr. Malone owned a stake. The deal gave Mr. Malone a 13% voting stake in Cable & Wireless. Mr. Malone has recused himself from the talks between Liberty Global and Cable & Wireless.
Liberty Global has been on an acquisition spree over the past few years as it seeks to build an international media and cable powerhouse. A series of large acquisitions in recent years, including buying the U.K.’s Virgin Media Inc. and Dutch cable operator Ziggo NV, have made Liberty Global the largest cable operator in the world by subscribers, with 27 million customers across 14 countries.
Of late, Liberty Global has been snapping up stakes in content companies. In the past year, it has agreed to acquire Irish broadcaster TV3 and taken stakes in All3Media, British broadcaster ITV and Lions Gate Entertainment Corp.
Liberty Global is separate from Mr. Malone’s Liberty Broadband Corp. , which backs U.S.-based Charter Communications Inc., the company buying Time Warner Cable Inc. and Bright House Networks.
New York Times
New York, New York
17 November 2015
Liberty Global, the European cable and wireless operator controlled by John C. Malone, agreed on Monday to buy the British telecommunications company Cable & Wireless Communications 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 one-time 4.5 cent dividend that would be paid once the transaction closed.
The deal represents a premium of roughly 50 percent on Cable & Wireless’s stock price before the potential takeover talks were first 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 T. 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, a British cable operator, and Ziggo, a Dutch telecommunications provider. Liberty Global also held early-stage talks with Vodafone, 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’s existing services to expand further there.
Mr. Malone already has a 13 percent 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 Mr. Malone.
Cable & Wireless
London, United Kingdom
14 February 2011
CABLE & WIRELESS COMMUNICATIONS PARTNERS WITH CUBA AND VENEZUELA ON NEW FIBRE OPTIC CABLE
25 year tri-nation cable-landing agreement between LIME (Cable & Wireless Communications Caribbean operation) and TGC (owned by Telecom Venezuela and Transbit SA of Cuba)
Cable & Wireless Communications to provide TGC capacity to Europe Major upgrade to Cuba’s Internet and data transmission capability
Cable & Wireless Communications (CWC) announces that LIME, its operation in the Caribbean, has signed a multi-million dollar contract with Telecommunicaciones Gran Caribe (TGC), a joint venture between Cuba (Transbit SA) and Venezuela (Telecom Venezuela).
LIME will be the strategic landing partner in Jamaica for TGC’s planned 240-kilometre undersea cable segment from Cuba to Jamaica. As part of the agreement, Cable & Wireless Communications will also carry voice and data traffic from Cuba to Europe.
The TGC cable will run from Puerto de la Guaira in Venezuela to Santiago in Cuba, then to LIME’s landing station in Ocho Rios, Jamaica - an entire length of more than 1500 kilometres. Itis the first international telecoms cable connection to Cuba for several decades, and will facilitate a significant increase in access to telecoms and internet services for Cuba. Today Cuba relies on satellite capacity for all of its international connectivity. The ultra high bandwidth infrastructure is projected to provide Cuba with data download speeds up to 3000 times faster than satellite, and is expected to lower the cost of international phone calls.
The cable, which lands in Ocho Rios, Jamaica today, will provide direct connectivity between the countries for voice and data traffic, with greatly increased capacity. CWC will also provide TGC with interconnect services and private leased circuit capacity between Jamaica and London.
Tony Rice, CEO of Cable & Wireless Communications said: “Our footprint in the Caribbean is unique and I am delighted this has given us the opportunity to partner with TGC and play a role in developing telecommunications in Cuba.”
David Shaw, CEO of LIME said: “LIME is delighted to have been chosen by TGC to be its partner in this very important venture. We are a genuine regional company and an important part of our mandate is to ensure that the entire region is served by the most modern telecoms technology available and our enterprise and carrier customers have access to world-class capability.”
Wilfredo Morales, President and Waldo Reboredo, Vice President of TGC said: “We are delighted to be collaborating with LIME on this venture which is a breakthrough of enormous importance to the people of Cuba, Jamaica, Venezuela and several other countries in Latin America. It will bring significant improvement in the quality of communications, with a substantial increase in data transmission speed. It will also facilitate and improve long distance medical consultation and cultural and educational exchanges – that is, it will have an economic and social impact on these countries.”
LIME also recently completed the installation of its new East-West Cable connection, linking Jamaica, Dominican Republican and the British Virgin Islands. The East West Cable completes LIME’s Caribbean “network ring” and will substantially increase the region’s available bandwidth.
About Cable & Wireless Communications
Cable & Wireless Communications is a global, full-service communications business. We operate leading telecommunications businesses through four regional units – the Caribbean, Panama, Macau and Monaco & Islands. Our services include mobile, broadband and domestic and international fixed line services in most of our markets as well as pay-TV, data centre and hosting, carrier and managed service solutions. Our operations are focused on providing our customers – consumers, businesses, governments – with world-class service. We are the market leader in most products we offer and territories we serve.
LIME is the Caribbean’s leading telecommunications company, focused on building products and services that make Caribbean people’s lives better. LIME’s aim is to deliver the best communication services across the board, full stop. LIME is part of Cable & Wireless Communications, one of the world’s leading international communications companies.
19 November 2015: From Investor Relations at Cable & Wireless- "We already possess various permits previously issued from OFAC and see no impact from the transaction."