Cable & Wireless Communications Plc (CWC) agreed to acquire cable TV and Internet provider Columbus International Inc. to expand in the Caribbean and central America. The deal also gives billionaire John Malone a stake in the enlarged company.
Cable & Wireless will pay $707.5 million in cash and sell 1.56 billion new shares, as well as raise additional debt to finance the $1.85 billion deal, the London-based company said in a statement today. Malone owns 22 percent of Columbus through one of his private companies and has amassed an international pay-TV empire that stretches across countries from Hungary to the U.K. to Chile.
“This is a game changer for Cable & Wireless -- it puts us very much back on the map,” Chief Executive Officer Phil Bentley said on a conference call today. “This a great opportunity for us to build scale and become the dominant player” in bundled TV, Internet and phone services and business-to-business.
The transaction is expected to add to earnings in the second year after completion. Cable & Wireless will also assume Columbus’s debt of $1.17 billion as of June 30. Closely held Columbus provides broadband services in 17 countries throughout the Caribbean, Latin America and the Seychelles.
Columbus adds a significant pay-TV operation and so-called next-generation fiber network to Cable & Wireless’s existing businesses, Bentley said.
Cable & Wireless fell 6.3 percent to 45.85 pence at 8:42 a.m. in London, giving the company a market value of 1.16 billion pounds ($1.9 billion).
Through international cable company Liberty Global Plc (LBTYA), Malone already owns 60 percent of Caribbean cable and broadband provider Liberty Cablevision of Puerto Rico LLC. With a net worth of $7.4 billion, according to the Bloomberg Billionaires Index, Malone also owns Liberty Interactive Corp. and Liberty Media Corp., which has share interests in the Starz pay-TV channel, Live Nation Entertainment Inc. and Viacom Inc.
Cable & Wireless was formed in 2010 in a company split that created Cable & Wireless Communications and Cable & Wireless Worldwide. The latter was acquired by Vodafone Group Plc (VOD) in 2012.
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Thursday, November 6, 2014