Trinidad and Tobago: Just months after the finalization of Cable and Wireless Communications’ (CWC) acquisition of Columbus International, comes word of another development that can significantly change the region’s telecommunications landscape.
Once again it involves CWC but this time around the British telecommunications company is being targeted for takeover by Liberty Global, a European company.
Late Thursday, CWC confirmed it was in takeover discussions with Liberty Global. Negotiations have centered around a price of US$5.5 billion
Liberty Global, which is controlled by John C Malone, wants to expand its presence in Latin America and the Caribbean and the talks are focused on a possible bid to acquire CWC for cash and shares. The company has until November 19 to make a formal bid for CWC.
“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,” CWC said in a news release.
However, the company’s shares rose more than 20 per cent in London on news that Liberty Global might be preparing a takeover bid.
Malone already has a 13 per cent stake in CWC as a result of an earlier deal in which the British company paid him about US$1.9 billion in cash and stock for Columbus International, which he partly owned.
If successful, a takeover of CWC would see Liberty Global gaining control of an entity that provides pay television, broadband, mobile and traditional land line telephone services to approximately six million subscribers in the Caribbean, Monaco, Panama and the Seychelles. The company posted revenue of US$1.8 billion in its last fiscal year, which ended in March.
Last November, CWC launched its bid to acquire Columbus International for US$1.85 billion, including the assumption of debt.
Liberty Global’s operations are mainly in Europe — 12 of its 14 markets are located there — and its presence in the region is currently limited to Puerto Rico and Chile.
In recent years, the company has bought out Virgin Media, a British cable operator, and Dutch telecom provider Ziggo.
It first signaled its interest in expanding in Latin America and the Caribbean last July with announcement of the establishment of the LiLAC Group to explore the growth potential of its operations in this part of the world.
A possible takeover of CWC by Liberty Global will mean that the region’s regulatory agencies will once again have to go through the processes which were followed for the CWC/Columbus International merger, Chris Seecharan, executive director of the Telecommunications Authority of T&T (TATT), said yesterday.
Reached for comment, Seecharan said TATT officials “got a whiff” of a possible takeover of CWC on Thursday and they were keeping a close watch on the situation.
If Liberty Global made a formal bid for CWC, he explained, TATT and the other Caribbean regulators would have to do a parallel of what was done during the course of the CWC/Columbus merger, including an assessment of the possible impact on the local and regional markets.
“We have been alerted and will start doing preliminary work. If it is confirmed we will have to intervene,” Seecharan