Liberty Global in M&A Talks With CWC
Liberty Global is in active talks to acquire Cable & Wireless Communications (CWC), a fixed-line and mobile operator with customers in 42 countries across the Caribbean and Latin America. The two companies confirmed rumors of the talks Thursday, but also asserted that there is no formal transaction offer on the table. According to regulatory rules, Liberty Global must now either announce an offer, or its intention not to make an offer, by the end of the day on November 19.
The news sent Cable & Wireless Communications 's share price rocketing by 20% on the London Stock Exchange in late trading to 70 pence per share.
Liberty Global Inc. (Nasdaq: LBTY) has been on a buying spree in recent years, picking up UK cable operator Virgin Media Inc. (Nasdaq: VMED) in 2013, Dutch operator Ziggo B.V. in 2014 and most recently Belgian mobile operator BASE earlier in 2015, among other deals. The addition of CWC would bring in more than 6 million new customers and annual revenues of more than $2.4 billion. According to The Wall Street Journal, a deal to acquire CWC could be worth more than $5 billion at face value, or roughly $8 billion with debt taken into account.
If Liberty Global does make a move to buy CWC, it would fall in line with the company's recent emphasis on adding mobility to its traditional triple-play bundles of fixed-line video, voice and data services. At the SCTE Cable-Tec Expo conference last week, Liberty Global CTO Balan Nair noted that the company currently has about 4.5 million mobile subscribers, with that number projected to exceed 8 million by the end of the first quarter of 2016.
According to Nair, adding mobility to the service bundle significantly helps to reduce customer churn, and the effects aren't only because early quad-play adopters are also the company's most loyal customers.
"Not just in the beginning… but over time, the churn rate, it is discernible between the quad-play customer and the non-quad-play," said Nair.
In addition to speculation over Liberty Global and CWC, there has also been press discussion recently on the possibility of Liberty Global purchasing T-Mobile Netherlands . According to reports, Deutsche Telekom AG (NYSE: DT) is interested in selling off its Dutch mobile subsidiary.
In September, Liberty Global and Vodafone Group plc (NYSE: VOD) called off talks around a potential asset swap. That move too would have given Liberty Global broader mobile networking reach. (See Vodafone, Liberty Call Off Asset-Swap Talks.)
— Mari Silbey, Senior Editor, Cable/Video, Light Reading