UK-based cable group Liberty Global has announced that it has made a recommended offer for all outstanding – and to be issued – shares of pan-Caribbean telecoms operator Cable & Wireless Communications (CWC). Pursuant to the offer, CWC will be acquired in exchange for Liberty Global shares, in a ‘scheme of arrangement’ that values the other group at GBP3.5 billion (USD5.3 billion), or an implied price of GBP0.78 per CWC share, based on closing share prices as of 13 November. Further, CWC shareholders will be entitled to receive a special dividend in the amount of GBP0.03 per share at the closing of the transaction, which would be in lieu of any previously announced dividend. As part of the transaction Liberty Global will assume CWC’s existing proportionate net debt, which stood at USD2.7 billion as of 30 September 2015. Liberty Global anticipates that the merger will close in the second quarter of 2016.
Completion of the acquisition is subject to, among other conditions, Liberty Global and CWC shareholder approvals, certain regulatory agreements and court sanction of the scheme of arrangement. Following the completion of the acquisition, CWC will be attributed to Liberty Global’s regional offshoot Liberty Latin America & Caribbean Group (LiLAC Group), which currently comprises its operations in Chile and Puerto Rico. Based on the offer set forth above, the LiLAC Group will be approximately 25.44%-owned by existing LiLAC Group shareholders on a pro forma basis, and 7.21%-owned by existing CWC shareholders, with the remaining 67.35% controlled by the inter-group interest in favour of Liberty Global.
Mike Fries, CEO of Liberty Global, commented: ‘The acquisition of Cable & Wireless represents a watershed moment for our recently created LiLAC platform. It will add significant scale and management depth to our fast-growing operations in Latin America and the Caribbean, while creating a new regional consumer and B2B powerhouse. Upon completion, the combined business will serve ten million video, data, voice and mobile subscribers, with leading positions across multiple markets’.