CWC confirms takeover interest from Liberty Global; deal could reach USD5bn

23 Oct 2015

European cable giant Liberty Global is in talks to acquire pan-Caribbean operator Cable & Wireless Communications (CWC), the Wall Street Journal has reported, in a deal that could be valued at more than USD5 billion. Sources familiar with the negotiations say a deal could be reached before both parties report their financial results in early November. The projected deal follows CWC’s own USD1.85 billion acquisition of Caribbean rival Columbus International earlier this year. Interestingly, that deal handed Columbus shareholder John Malone – Liberty Global’s chairman and largest voting shareholder – a 13% voting stake in CWC. As a result, Mr Malone has recused himself from the discussions between Liberty Global and CWC, in an effort to avoid a potential conflict of interest.

The WSJ’s sources speculate that, if the takeover approach is successful, CWC will likely be folded into Liberty Global’s regional offshoot Liberty Latin America & Caribbean Group (LiLAC), which currently comprises the group’s operations in Chile and Puerto Rico. The business daily also quotes Liberty Global CEO Mike Fries, who told an investor conference last month: ‘That region as a whole requires massive consolidation … It is fragmented. It is underpenetrated. It is inefficient. If there was ever a part of the world that would benefit from the kind of things we do in terms of bringing rational consolidation to these broadband connectivity platforms, we think this is’.

Liberty Global and CWC have released separate statements confirming the press speculation, with the latter noting: ‘Shareholders are advised to take no action. There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made’.

United Kingdom, Cable & Wireless Communications (CWC, incl. Columbus Int.), Liberty Global (incl. LGI)