John Malone’s Liberty Global agreed to buy Cable & Wireless Communications in a cash-and-stock transaction valued at 3.5 billion pounds ($5.3 billion), extending the U.S. billionaire’s European cable empire deeper into Latin America. Though Cable & Wireless’s corporate headquarters is in London, its operating headquarters is located in Coral Gables.
The deal represents a multiple of 10.7 times Cable & Wireless Communications’ adjusted annual earnings before interest, depreciation, taxes and amortization, after taking into consideration cost synergies, according to a statement.
The purchase would give Malone a critical mass in Latin America, where he created a tracking stock in July called LiLAC for Liberty Global’s assets in Chile and Puerto Rico. Malone, who spent more than $50 billion the past decade amassing cable companies across Europe, looks to do the same in faster-growing economies in Latin America, and may even spin off that unit in the future, people familiar with the matter said last month, when the companies announced they were in talks.
Cable & Wireless, which also owns a network in the Seychelles, received more than half of its $1.75 billion in revenue last year from Panama and the Caribbean. Malone became a shareholder last year when Cable & Wireless bought his cable TV and Internet provider Columbus International Inc. As part of that deal, Malone and the two co-founders of Columbus were given a 36 percent stake of the combined company.
Malone’s growing presence in Latin America also dims the hopes for a revival of talks to combine or swap assets in Europe with Vodafone Group. The two sides in September ended their own negotiations. While Malone has said Vodafone’s assets in Europe would be attractive, he said the two companies have different corporate cultures that would make a combination difficult.