Liberty Global To Acquire Cable & Wireless Communications In $5.3 Bln Deal

(RTTNews) - Liberty Global plc (LBTYA, LBTYB, LBTYK, LILA , LILAK) and Cable & Wireless Communications Plc (CWC.L) announced a recommended offer by Liberty Global for all outstanding and to be issued shares of CWC.

As per the Offer, Liberty Global would acquire CWC for shares of Liberty Global in a scheme of arrangement valuing CWC at a total equity value of about 3.5 billion pounds or $5.3 billion, or an implied price of 78.04 pence per CWC share, based on closing share prices as of November 13, 2015.

In addtion, CWC shareholders would be entitled to receive a special dividend in the amount of 3.00 pence per share at the closing of the transaction, which would be in lieu of any previously announced CWC dividend.

Under the terms of the Offer, Liberty Global will issue a maximum of approximately 31.7 million LBTYA, 77.5 million LBTYK, 3.6 million LILA and 8.9 million LILAK ordinary shares. In addition, Liberty Global will assume CWC's existing proportionate net debt as part of the transaction, which was $2.7 billion as of September 30, 2015.

Liberty Global expect that the dividend and estimated fees and expenses will be funded from CWC liquidity including incremental debt borrowings and LiLAC Group liquidity.

Based on the Offer, the LiLAC Group, on a pro forma basis, will be approximately 25.44% owned by existing LiLAC Group shareholders and 7.21% owned by existing CWC shareholders, with 67.35% represented by the inter-group interest in favor of the Liberty Global Group. No decision has been made as to whether the LiLAC businesses would be spun-off; however, outstanding inter-group interests are generally distributed to shareholders in spin transactions.

The offer represents an 11% premium to the 5-day CWC VWAP of 73.11p as of November 13, 2015 close and a premium of 40% to the closing share price of CWC of 58.00p on October 21, 2015, the day before CWC announced that they were in talks to be acquired by Liberty Global.

The Offer includes three alternative proposals which CWC shareholders can elect to receive: a recommended proposal and two alternative proposals. The CWC shareholders electing to receive the recommended proposal will receive as consideration an amount of Liberty Global shares, with a right to "mix and match" LiLAC shares, subject to pro-ration.

The recommended proposal would have an estimated value of 86.00 pence per share based on the closing share price of Liberty Global shares as of November 13, 2015.

Shareholders electing to receive either of the two other proposals will receive combinations of Liberty Global and LiLAC shares in different proportions.

Based on the required steps and subject to the necessary conditions and approvals, Liberty Global anticipates that the Offer will close in the second quarter of 2016.

In addition to the extensive integration that is ongoing between CWC and Columbus, which is expected to generate $125 million of run-rate cost savings and $145 million of one-time capital expenditure synergies by March 31, 2018, CWC has also disclosed that they expect material revenue synergies through cross-selling, improvements in the video offering and network quality, and enhancements in the B2B offering.