Liberty Global to buy Cable & Wireless for $5.3 bln in stock

The cash-and-stock transaction will extend Liberty owner John Malone’s empire deeper into Latin America, giving the United States billionaire greater leverage for more deals in the region.

Liberty Global Plc has agreed to buy Cable & Wireless Communications Plc for £3.5 billion (US$5.3 billion), Bloomberg News is reporting.

Scale was a key factor in the decision, according to Bentley.

Liberty Media chairman became a shareholder a year ago when Cable & Wireless bought his cable TV and Internet provider Columbus worldwide.

Shares in the firm have leapt almost 29 per cent since the talks with Liberty Global were made public.

The deal, which includes three options, represents an aggregate value of 81.04 pence per share, including a special dividend of 3 pence per share.

The Board of Cable & Wireless Communications, having been approached directly by Liberty Global, has concluded that it is in the long-term best interests of the company, its shareholders, employees and customers, alike, to sell the business for an overall price of approximately $8.2 billion(1).

“The acquisition of Cable & Wireless represents a watershed moment for our recently created LiLAC platform”, said Mike Fries, chief executive of Liberty Global.

“Upon completion, the combined business will serve 10 million video, data, voice and mobile subscribers, with leading positions across multiple markets”, Fries added.

As of 19:24 shares in NASDAQ-listed Liberty Global were falling 1.72% to reach $44.57. “The disposal of Monaco, the creation of our regional hub in Miami and the recent acquisition of Columbus accelerated our competitive positioning whilst at the same time generating significant value for shareholders and enhanced service levels for our customers”. “The years ahead should bring new opportunities for further success, faster growth and enhanced customer benefits, built on the strong foundation we have created”, Bentley added.

Subject to the necessary conditions and approvals, Liberty Global said it expects that the deal will close in the second quarter of 2016. Liberty’s businesses are attributed to two tracking stock groups: the Liberty Global Group, which comprises the company’s European operations; and the LiLAC Group, which comprises Latin American and Caribbean operations.