The Board of Cable & Wireless Communications Plc (CWC) on Tuesday announced that it has reached agreement on the terms of a recommended acquisition for the entire issued and to be issued share capital of CWC by Liberty Global.
The Board of Cable & Wireless Communications, having been approached directly by Liberty Global, has concluded that it is in the long-term best interests of the company, its shareholders, employees and customers, alike, to sell the business for an overall price of approximately $8.2 billion.
The recommended offer delivers 86.82 pence per share to free float shareholders comprising shares in Liberty Global and a 3 pence per share Special Dividend. The offer represents a premium of approximately 50 per cent to the undisturbed price of CWC on Oct. 21, 2015.
CWC said in a statement that the non-free float shareholders have irrevocably undertaken to accept the alternative offers resulting in an overall blended offer price for CWC of 81.91 pence per share
Liberty Global is the world’s largest international cable television company, with nearly 27 million subscribers receiving over 57 million distinct services and generating approximately US$18 billion of annual revenues, with operations mainly in Europe, but growing ambitions in Latin America and the Caribbean.
“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,” CWC said in a statement.
It said that by adding Liberty Global’s strength and 1.5 million customers in Puerto Rico and Chile, backed by CWC strengths in adjoining markets and in leading submarine and terrestrial fibre networks, “together we expect to grow our Consumer and B2B offers even faster”.
Commenting on the deal, Chairman of CWC, Richard Lapthorne 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, hence the Board’s recommendation today.
“Taken alongside the irrevocable commitments made by John Risley, John Malone and Brendan Paddick, this offer will deliver a price per share of 87 pence to CWC’s free float investors and a 50 per cent takeover premium to the undisturbed price on 21 October 2015.”
CWC said it has created significant value for shareholders over recent years.
“The market capitalisation of CWC has grown from 1.1billion pounds sterling on Oct. 21, 2013 to 2.5 billion pounds on Oct. 212015, the day before Liberty Global’s interest in CWC became public.
“The total shareholder return over the last two years leading up to this date was 46 per cent in comparison with 16 per cent for the FTSE 250 over the same period. Incorporating the headline recommended offer price, CWC’s share price has grown to 86.82 pence, implying a total shareholder return of 119 per cent since 21 October 2013.