Liberty Global to buy Cable and Wireless

Liberty Global has agreed to buy Caribbean telecommunications company Cable & Wireless Communications for US$5.3 billion. 

The board of Cable & Wireless said it concluded that the $8.2 billion deal, including CWC’s debt, was in the long-term best interests of the company, its shareholders, employees and customers, after the operator of Flow in Cayman was approached directly by Liberty over a sale last month. 

Under the terms of the deal, Liberty offered $1.32 per CWC share and a 4.5 cent special dividend that would be paid on the closing of the transaction. 

This represents a premium of approximately 50 percent on CWC’s share price at the start of the takeover talks on Oct. 21 and an 18 percent premium on the Nov. 13 share price. 

Sir Richard Lapthorne, chairman of CWC, said, “While we remain confident that CWC’s unique and highly attractive business has a substantial long-term growth opportunity ahead of it, we believe the recommended offer represents an attractive premium for shareholders and secures earlier delivery of our long-term value potential.” 

Liberty Global is the world’s largest international cable television company, with nearly 27 million subscribers and about $18 billion in annual revenue. The company’s operations are mainly based in Europe after a number of acquisitions which included British cable operator Virgin Media and Dutch telecommunications provider Ziggo. 

Since further consolidation of the industry in Europe may attract the opposition of regulators, Liberty is focused on growing in other regions. 

Liberty Global’s chief executive, Michael T. Fries, said the acquisition would add significant scale and management depth to the company’s operations in Latin America and the Caribbean. 

CWC, which after the takeover of Columbus Communications recently rebranded its services in Cayman from LIME to Flow, said the deal would improve the company’s ability to offer products and services to customers in the region and add 1.5 million customers in Puerto Rico and Chile. 

“Backed by our strengths in adjoining markets and in leading submarine and terrestrial fiber networks, together we expect to grow our consumer and B2B offers even faster,” CWC said. 

Bill McCabe, the chief executive of Flow in Cayman, said the joint entity would combine the complementary skills of both organizations and materially improve the company’s provision of products and service to customers in the region. 

For Cayman’s operation specifically, it will be “business as usual” until the deal is complete, he added. “We will continue with our plans to enhance the customer experience and continue to deliver innovative products such as the recently launched Flow TV product.” 

Phil Bentley, chief executive of CWC, noted that since the launch of the company’s new strategy two years ago, CWC has transformed itself into a regional operator of broadband Internet, television, telephone and wireless services. The recent acquisition of Columbus accelerated the company’s competitive positioning and Liberty Global will offer scale and “world-class capabilities,” he said. 

Liberty Global owner John Malone already has a 13 percent voting stake in CWC as a result of the company’s takeover of Columbus, which was partly owned by Mr. Malone, for $1.9 billion in cash and stock. 

The deal is expected to be completed by the second quarter of next year. 

Michael T. Fries, CEO of Liberty Global

Michael T. Fries, CEO of Liberty Global
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  1. When I read the statements from the various CWC and Flow executives they remind me of an interview with former Fed charman Ben Bernanke. During the interview Mr. Bernanke in response to a question was explaining how he could and sometimes would speak for long periods of time and essentially say absolutely nothing (or nothing that could not have been said in five minutes or less).

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  2. What a huge loss of local Cayman jobs! What a ridiculous decision to allow non-Caymanian control and ownership. Last week I called the FLOW call center that was located in El Slavador. These call center jobs should be located in Cayman. Several days were wasted for my internet router to be replaced by a service technician, all the while I was getting charged full price per month without internet for 6 days. Why should Liberty Global care as long as they suck money from your bank account each month. Another blunder by the Cayman government allowing this take-over. Cayman will continue to bleed local jobs with non-Caymanian ownership of local businesses.Thousands of people are working for Cayman based businesses over the internet whilst living abroad, as Cayman screams high unemployment for Caymanians!

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  3. It does not matter whether we go from LIME to FLOW to LEMONADE it will be the same disaster as is now. Internet service and telephone communication is POOR.
    Customer service is POOR, Technicians do not follow up on complaints, and worst of all enquiries are answered by persons in some far away country, who cannot relate properly in the English language, nor do any of them know anything about the geographic layout of this Cayman Islands.
    When Cable and Wireless had this company some 40 more years ago, it was a little better, although they squeezed every dollars from its paying customers and charged an arm and a leg, and did not need to do so. They made millions and Billions off the residents, became greedy and we still ended up in a worse situation. Can a new take over make it any better? Make changes where needed and see. What is the reason that operator and enquiry services cannot be set up on island like before. Why aren’t technicians being trained to follow up on reports/requests. Changes have to be made or it will be the same old, same old.

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  4. I just can’t keep up with these name changes and takeovers.

    But will service improve or prices go down?

    Don’t hold your breath my friends.

    100mb Internet connection in UK costs about $20 CI per month.
    50mb Internet connection here costs about $150 CI per month.

    Yes I know this is a smaller market and we need underwater cables. But really.

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  5. We really can not complain because our gov’t has no published priorities or goals in this area. The ICTA has not stated any public policy goals or objectives, the Ministry of Infrastructure has not stated any, so we are lucky to get what we have.

    Regulatory oversight is lacking; rules are not followed and we get stuck with the results. It is a shame!

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