“By
joining forces at this time, we combine our high growth assets in Latin America
and the Caribbean, with the scale and complementary skills of a truly world
class global player, materially improving our ability to offer leading products
and services to customers in the region we serve. And by adding their strength
and 1.5 million customers in Puerto Rico and Chile, backed by our strengths in
adjoining markets and in leading submarine and terrestrial fibre networks,
together we expect to grow our consumer and B2B offers even faster”
CWC in a statement to
shareholders after the purchase of CWC by Liberty Global for US$8.2 billion
People
of Jamaica, we have a deal!
Liberty
Global has agreed to acquire CWC (Cable and Wireless Communication) for US$8.2
billion Deal on Monday November 16th 2015 as reported in the article
“Liberty
Global To Acquire CWC In US$8.2b Deal”, published Monday November 16, 2015,
The Jamaica Gleaner.
 |
The
deal, which consists of cash and equities purchase, translate to 86.82 pence
(US$1.32) per share is an 18% premium on CWC’s stock price up to Friday
November 13th 2015. At US$8.2 billion dollars, it covers the debt as
well as values CWC at 12.3 times its EBITDA, which is Revenue minus Expenses
excluding tax, interest, depreciation and amortization.
Liberty
Global, the world’s largest cable television company has founder and Chairman
John Malone at its helm. Malone had long expressed a desire since October 2015
to wrap up the purchase of CWC by November 2015 as reported in my blog article
entitled “US$5.5
billion Liberty Global purchase of CWC's FLOW Jamaica - Why Digicel Play will
truly Liberate Cable Subscribers”.
John
Risley and Brendan Paddick have already cashed in their combine 36% stake in
CWC to liberty, making Liberty Global chairman John Malone possess a 49% stake
in CWC, more than enough to take control of the CWC board. Already CWC has put
out a statement announcing its recommendation of the takeover offer to
shareholders.
Liberty Global acquires
CWC – How Digicel Play competition means benefits for Jamaica and the Caribbean
With
the deal expected to close in the Second Quarter of 2016 after the London Stock
Exchange and NYSE Stock exchange as well as SEC (Securities and Exchanges
Commission) grants their blessing, expect to see some interesting changes at
FLOW, the subsidiary that Liberty Global is really after. Liberty Global will merge
the CWC operations with LiLac, as predicted.
Apparently
27 million subscribers and US$18 billion of annual revenue from the Eurozone,
USA and the Netherlands; they had to go after CWC's 6.3 million customers and a
presence in 42 markets. Despite the purchase of their debt, they've more or
less netted a solvent company that's racking up US$2.4 billion in revenue via
its multiple operations:
1.
LIME and Flow operations in the
Caribbean
2.
BTC in the Bahamas
3.
Mas Movil in Panama
4.
C&W Business and C&W Networks elsewhere
Where
does Liberty Global go from here?
Most
likely continue with the launch of the 4G LTE (Long Term Evolution) Network and
a possible rollout of a FTTH (Fiber to the house) network to replace the
Coaxial Cable Network that they inherited from FLOW as noted in my blog article
entitled “CWC
invests US$250 million in LIME Jamaica - Mobile 4G LTE, Broadband, LIME TV and
FTTH Expansion will make LIME the Google of Jamaica” as they chase the
expansion of Digicel Play!
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