Cable & Wireless in £3.7bn bid talks with Liberty Global
-
Loading... - PATRICK PHELPS
- 23 Oct 2020
- 847 Views
- 0 Like
- 0 Comment
Liberty Global, the owner of Virgin Media, is in talks to take over Cable & Wireless Communications (CWC) in a deal that could value the Caribbean focused telecoms group at nearly £4bn.
Shares in CWC jumped 21 per cent to end at 71p, valuing it at £3.1bn, amid reports that Liberty could offer about £3.7bn in cash and stock, or about 85p a share. It would also take on CWC’s debt of about £2.6bn.
Both companies confirmed they were in talks shortly after the London stock market closed.
CWC, however, cautioned that there is “no certainty that any firm offer will be made nor as to the terms on which any firm offer might be made” and advised its shareholders to take no action.
Liberty Global, which is chaired by the veteran US deal maker John Malone, now has until 19 November to put up a firm offer to investors or shut up and rule out pursuing CWC for at least six months under the City’s Takeover Code.
Both companies are due to report results next month, with CWC’s figures due on 5 November, a day after Liberty Global’s.
Mr Malone’s cable company, which recently abandoned attempts to swap assets with Vodafone, is currently focused on Europe, where it owns the UK’s Virgin Media and Unitymedia in Germany.
However, it also has operations in Chile and Puerto Rico and a purchase of CWC would strengthen it in a market that is dominated by the Mexican billionaire Carlos Slim and Spain’s Telefonica.
CWC is particularly strong in the Caribbean, where it offers landline, internet, mobile and pay-TV services mainly under the Lime brand, and competes with Digicel, the group owned by the Irish billionaire Denis O’Brien.
The UK company, headed by the former boss of British Gas Phil Bentley, also has interests in Panama and the Seychelles. It shifted its headquarters from London to Miami, Florida in 2013.
Mr Malone already has a 13 per cent stake in CWC thanks to the UK group’s $3bn purchase last year of Columbus International, another Caribbean telecomms operator, which he personally held 22 per cent in.
As a result, it is understood that Mr Malone will not take part in the takeover talks between the two boards because of the potential conflict of interest.
CWC was demerged from Cable &Wireless in 2010. Its Caribbean operations date back to the 1870s when it introduced telegraph cables to the region.
In the 1980s Cable & Wireless became the first company to compete with British Telecom as the UK market was deregulated, but the company was broken up in 2010, splitting into CWC and Cable & Wireless Worldwide (CWW).
