International cable-TV company Liberty Global says it is acquiring Cable & Wireless Communications, a London-based telecommunications company with operations in the Caribbean, for stock and a special dividend worth $5.3 billion.
Denver-based Liberty Global PLC, which is controlled by billionaire John Malone, said it would fold Cable & Wireless into its LiLAC business unit, which it spun off with a tracking stock in July. Combined, the entities will have 10 million subscribers of video, broadband Internet access, and fixed and mobile phone service.
Liberty's offer amounts to $1.23 per share plus a dividend of 5 cents per share. The total is 11 percent above the average price of Cable & Wireless stock last week, and 40 percent above its closing price on Oct. 21, the day before Cable & Wireless announced it was in talks to be acquired by Liberty.
Liberty Global CEO Mike Fries said the acquisition will add scale and management depth to its operations in Latin America and the Caribbean. The combination is estimated to create cost savings in excess of the $125 million per year that is targeted to be saved because of Cable & Wireless's acquisition of Columbus International earlier this month.
The deal needs to be approved by shareholders of both companies. It is expected to close in the quarter ending in June next year.