It will be business as usual for Flow operations in Barbados, following the agreement by the board of the parent company, Cable & Wireless Communications (CWC), to sell its operations to Liberty Global in a deal worth a whopping US$8.2 billion, including debt.
However, Chief Executive Officer of CWC Phil Bentley is giving the assurance that the takeover will result in “different” content and quality, along with “continued investment” in the region.
He has also said that a name change was unlikely, while stressing that the buyout was an opportunity for “growth”.
“This is not a decision we take lightly. CWC was approached directly by Liberty and made an offer,” said Bentley, speaking from his
London-based office via teleconferencing this evening.
The offer by Liberty Global, one of the largest international cable television companies, is to buy CWC operations for 86.82 pence per share in cash and Liberty Global shares for free float shareholders, representing a premium of approximately 50 per cent of the price at which CWC shares were valued the day before Liberty Global’s interest in acquiring the company became public, and a premium of approximately 18 per cent to where CWC shares were trading last Friday, November 13, 2015.
Describing the offer as “a good price by any standard”, Bentley said CWC was engaged in the trade at this time because “Liberty is the largest international cable TV company, with great content, great business in Europe and has ambitions to expand in the Caribbean and Latin America”.
“Liberty does not have a presence in the Caribbean. So they are highly unlikely to want to change the name. [We] have gone through the expense of building the Flow brand and rebranding the stores . . . so I don’t see them changing the brand at all,” he said.
“In terms of impact in Barbados, [there will be] no impact whatsoever. There will be no operational impacts on the team. We have just gone through the integration. So we are going to be cracking on the business in Barbados,” he told Barbados TODAY.
“Cable & Wireless will continue to run the business until the change. We wouldn’t have sold the company to a company not sharing in our philosophy – investing in networks, investing in people and giving great customer service,”
Pointing out that while there were some “difficulties” following CWC’s recent acquisition of Columbus Communications’ operations and the subsequent amalgamation of its local operations under the Flow brand, the CWC boss said there should be no impact on the operations here following the latest buyout.
“We just want to see better content, better value for money and more investment. I think being part of a bigger company should secure that future for the business,” he said.
Asked if Barbadians should expect the investment started by Flow to continue, Bentley said “absolutely”, adding that the company was committed to its investment and “will crack on with it”.
Liberty Global has nearly 27 million subscribers receiving over 57 million distinct services and generating approximately $18 billion in annual revenues.
“Together, we think we can bring a powerhouse to the region, continue to invest and grow the business and we think our customers will see the difference in content, quality. We think they will continue to invest in the network just as Cable & Wireless has been doing. And I think for our people it is an opportunity to work for a bigger company. We would now be a
$20 billion sales company rather than a $2.5 billion, which is what Cable & Wireless is,” explained Bentley.
“So we would say it is a win-win-win – it is a win for our shareholders. They will make a good return . . . . It is a win for our employees because obviously they are working for a bigger company with more scale and it should be a win for our customers because they are a part of an international company that can bring innovation, quality, content and entertainment and a mobile fixed network,” he added.
Saying CWC officials were now “very familiar” with the regulations in the region following the recent merger, Bentley gave the assurance that there should be no issue in getting the necessary regulatory approvals for the current deal since the companies did not have any overlapping operations and were not competitors here.
However, he said he expected it to take “a good six months” for the companies to clear the regulatory hurdles. “So we would hope that the regulator would consider it to be in the best interest of the countries where we operate,” added Bentley.
The CWC executive dismissed talk that he personally had pocketed from the deal and had earned an estimated 10 million pounds sterling from the deal.
“It is not true,” he said. “I have already invested significant amount of money on my own and into the company.”