Liberty Global to acquire CWC in US$8.2b deal
Liberty Global has agreed to acquire Cable & Wireless Communications Plc in a cash-and-shares deal worth US$8.2 billion, inclusive of debt.
The offer of 86.82 pence (US$1.32) per share is an 18 per cent premium on CWC's stock price up to Friday. The offer is also 12.3 times CWC's earnings before interest, tax, depreciation, and amortisation.
The transaction is expected to close in the second quarter of 2016.
Liberty's largest shareholder, John Malone, is a minority owner of CWC. Malone, John Risley and Brendan Paddick have entered into irrevocable agreements to sell their combined 36 per cent stake in CWC to Liberty, CWC said in a statement announcing its recommendation of the takeover offer to shareholders.
The three were among the principal owners of Columbus International, which was acquired by CWC earlier this year for US$3 billion, inclusive of debt, and led to the merger of the Flow and LIME businesses across Columbus' regional markets.
Liberty Global is the world's largest cable television company, with nearly 27 million subscribers and US$18 billion of annual revenue. Its main operating zone is in Europe, but the company also has markets in the region, through LiLac.
CWC, which is based in London but operates from Miami, has 6.3 million customers and a presence in 42 markets. Its annual revenue is US$2.4 billion through its LIME and Flow operations in the Caribbean, BTC in The Bahamas, Mas Movil in Panama, C & W Business and C & W Networks.
"By joining forces at this time, we combine our high growth assets in Latin America and the Caribbean, with the scale and complementary skills of a truly world-class global player, materially improving our ability to offer leading products and services to customers in the region we serve. And by adding their strength and 1.5 million customers in Puerto Rico and Chile, backed by our strengths in adjoining markets and in leading submarine and terrestrial fibre networks, together we expect to grow our consumer and B2B offers even faster," said CWC.
Liberty is expected to merge the CWC operations with LiLac.