FLOW gets a new owner

John Malone
John Malone

John Malone’s Liberty Global Plc has agreed to buy Cable & Wireless Communications (CWC), the company which trades here as FLOW,  in a cash-and-stock transaction valued at 3.5 billion pounds (US$5.3 billion), extending the US billionaire’s European cable empire deeper into Latin America and the Caribbean with an eye for more deals in the region.

The deal represents a multiple of 10.7 times CWC’s adjusted annual earnings before interest, depreciation, taxes and amortization, after taking into consideration cost synergies, according to a statement. CWC shareholders will get a special 3 pence a share dividend at the deal’s close. The transaction is valued at 78.04 pence per CWC share, based on Friday’s closing price.

The purchase would give Malone a critical mass in Latin America, where he created a tracking stock in July called LiLAC for Liberty Global’s assets in Chile and Puerto Rico. Malone spent more than $50 billion the past decade amassing cable companies across Europe. Now, with Cable & Wireless, he is poised to do the same in faster-growing economies in Latin America, and may even spin off that unit in the future, people familiar with the matter said last month, when the companies announced they were in talks.

Cable & Wireless, which also owns a network in the Seychelles, received more than half of its $1.75 billion in revenue last year from Panama and the Caribbean. Malone became a shareholder last year when Cable & Wireless bought his cable TV and Internet provider Columbus International Inc. As part of that deal, Malone and the two co-founders of Columbus were given a 36 percent stake of the combined company.

Malone is using Liberty’s LiLAC Group tracking stock in the deal. 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.

As part of the deal Liberty Global will take on CWC’s net debt, which was $2.7 billion as of Sept. 30, 2015.

Malone’s growing presence in Latin America and the Caribbean also dims the hopes for a revival of talks to combine or swap assets in Europe with Vodafone Group Plc. The two sides in September ended their own negotiations. While Malone has said Vodafone’s assets in Europe would be attractive, he said the two companies have different corporate cultures that would make a combination difficult.

Shares of Liberty Global fell 1.8 per cent to $44.54 at 2:14 p.m. in New York. Cable & Wireless closed up 0.4 per Malone cent to 73.75 pence in London before the deal was announced. (Bloomberg)

7 Responses to FLOW gets a new owner

  1. jrsmith November 16, 2015 at 5:35 pm

    Hey, bajans , you all are getting a taste of how the big boys play. corporates, 10.7 billions BDS, more money than our government can dream of. Watch how this is going to be played out. see the change witch took place, in London and New York. how the stock played out, this is how the cartels work. in barbados names like Vodaphone. these are not cowboys playing.

  2. Tristan John
    Tristan John November 16, 2015 at 5:42 pm

    Bim getting pass round like a spliff!

  3. Marva Lashley-Todd
    Marva Lashley-Todd November 16, 2015 at 7:00 pm

    No wonder the 15.99 plan is no more. Now the least for 30 days is $35

  4. Rosalind Eastmond
    Rosalind Eastmond November 16, 2015 at 7:19 pm

    Wait…1 Morning we going Wake up and we in going find the name …Barbados on the Map .
    Barbados name will be changed to….”Take That with a Smile “.

  5. Venice Daisley
    Venice Daisley November 16, 2015 at 10:03 pm
  6. st.clair Worrell November 16, 2015 at 10:10 pm

    These people with lots of money just don’t wake up one morning and say…lets go to Barbados… They read up, they connect with other money people and are well versed on the nuts and bolts of this place called Barbados..
    They know we are a poor country, acting like a Goliath when in fact we are only a Lazarus waiting on crumbs from the table..sorry to say… Much to buy but nothing to sell other than sun, sea and sand which is very tenuous…Therefore those with lots of money to invest whether with good intentions or not will head to BIM seeking to increase their earnings…. Can you blame them????


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