Just weeks after calling off talks with Vodafone, Liberty Global is back in action. It is now headed to warmer climates, as it continues talks with UK-listed Caribbean telco CWC about a deal worth up to US$5.5bn.
Just weeks after ending asset swap talks with UK giant Vodafone (LSE:VOD), cable giant Liberty Global (NASDAQ:LBTYA) has confirmed that is discussing a takeover of Caribbean telco Cable & Wireless Communications (LSE:CWC). The cash and stock offer could reportedly be worth between US$5bn and US$5.5bn, and would include CWC’s US$2.6bn debt.
Evercore and JP Morgan are advising CWC.
The Wall Street Journal, which broke the news, suggested that a deal could be agreed in early November. Having confirmed the talks, Liberty Global must now make an offer by 19 November, or announce its intention not to do so, under rule 2.7 of the UK’s takeover code.
Liberty Global chairman John Malone personally owns 19% of CWC, having in 2013 acquired an equity stake in Caribbean cableco Columbus International, which was acquired by the UK-listed firm earlier this year. That deal, cleared by regulators, has subsequently been questioned by Caribbean body Caricom.
CWC is the result of a demerger of historic UK telco Cable & Wireless in 2010. The other unit, Cable & Wireless Worldwide (CWW), was sold to Vodafone in 2012 in one of that company’s first fixed/mobile convergence deals.
CWC’s main competitor is Digicel, which earlier this month called off a US$3.2bn New York listing, citing weak stock market conditions.
Offering fixed and mobile services to some six million customers (3.8 million mobile, 1.1 million fixed-line, 460,000 video and 665,000 broadband), CWC has annual revenue of over US$2.4bn. It also operates a 42,000km subsea fibre optic cable network, and has 38,000km of terrestrial fibre. It is present in 15 markets in the Caribbean, plus Panama. Its main brand is Lime.
Liberty Global, for its part, claims to have 27 million customers in 14 countries including Puerto Rico and Chile, offering a mix of cable, broadband and telephony.
Other big players present in Central America and the Caribbean are Millicom, América Móvil and Telefónica.