Batelco and CWC discussing GBP614m sale of Monaco & Islands business

18 Sep 2012

Bahrain Telecommunications Company (Batelco) is reportedly holding talks with UK-based Cable & Wireless Communications (CWC) with a view to acquiring the latter’s assets in Monaco and a number of small island nations. According to Reuters, which cites three banking and industry sources, the duo are negotiating a potential deal thought to be worth around GBP614 million (USD1 billion). While both Batelco and CWC have confirmed that they are discussing the possible sale, it is understood that a deal is not imminent, and both parties have stated that there is no guarantee that a deal will be reached. BNP Paribas and Citigroup are said to be advising Batelco on the transaction, while CWC has called on J.P. Morgan Chase.

CWC’s ‘Monaco & Islands’ business is managed through what it terms four ‘cluster’ operations: Monaco Telecom (MT); Channel Islands, Isle of Man (CIIM); Indian Ocean (IO); and South Atlantic and Diego Garcia (SADG). In total, CWC’s Monaco & Islands subsidiaries offer services including fixed and mobile voice, and broadband in a total of twelve markets: Afghanistan, Ascension, Diego Garcia, Falkland Islands, Guernsey, Isle of Man, Jersey, Maldives, Monaco, Seychelles, Solomon Islands and St Helena. As previously reported by CommsUpdate, at the end of June 2012 the Monaco & Islands unit recorded mobile, fixed voice and broadband accesses of 549,000 (534,000 at June 2011), 125,000 (128,000) and 58,000 (53,000) respectively.

For its part, Batelco was reported to have said in April 2012 that it planned to make at least one acquisition in 2012 as it seeks to offset falling domestic revenue. At that date, Batelco CEO, Sheikh Mohammed bin Isa Al Khalifa, was cited as saying: ‘The key is to increase scale … We are coming from a very small market and can only do so much in our own market. We want to grow our international operations and compensate for any potential loss in revenue in our home market.’ With acquisitions in mind, in September 2011 Batelco pulled out of a deal to acquire a 25% stake in Zain Saudi Arabia for USD950 million, after proposed terms could not be met. At present, Batelco has wireless subsidiaries in Jordan (Umniah) and Yemen (Sabafon), while its former Indian venture STel was shut down in February 2012, after having its licence revoked by the Supreme Court earlier that month as part of the country’s wave of concession cancellations. Batelco also holds minority stakes in internet service providers operating in Kuwait and Saudi Arabia.