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CWC agrees to buy Columbus International for USD1.85bn
6 Nov 2014
BarbadosGrenadaJamaicaSaint LuciaAntigua and BarbudaSaint Vincent and the GrenadinesTrinidad and TobagoCuracao
The board of Cable & Wireless Communications (CWC) has agreed to pay a total consideration of USD1.85 billion for 100% of the equity of Columbus International, a privately-owned, Barbados-based telecoms provider. The total will be settled through the payment of approximately USD707.5 million in cash and the distribution of 1.557 billion new ordinary CWC shares to entities ultimately controlled by John Risley (director and co-founder of Columbus), an entity ultimately controlled by John Malone (significant shareholder) and to Brendan Paddick (president, CEO and co-founder of Columbus). CWC has also announced the placing of new shares constituting approximately 9.99% of CWC’s existing share capital, which will be used in part to fund the acquisition.
As a result of the transaction, the board estimates that the enlarged group will be able to achieve recurring annualised pre-tax cost synergies of about USD85 million, which are expected to be delivered in full in the fiscal year 2017/18, and one-time capital expenditure synergies of some USD145 million in the first three years, following the closing of the acquisition, with additional revenue benefits also available.
Columbus, which generated revenue of USD505 million in the year ended 31 December 2013, has around 700,000 residential customers in the Caribbean, Central America and the Andean region. It offers services under the FLOW brand name in Trinidad & Tobago, Jamaica, Barbados, Grenada and Curacao, and also serves Saint Lucia, Saint Vincent & the Grenadines and Antigua & Barbuda under the brand name Karib Cable. Columbus also provides corporate data and cloud based services under the brand Columbus Business Solutions. Meanwhile, through its wholly owned subsidiary, Columbus Networks, the company provides capacity and IP services, corporate data solutions and data centre hosting throughout 42 countries in the greater Caribbean, Central American and Andean region. The telco presides over a fully protected, ringed submarine fibre-optic network spanning close to 42,300km and a 26,400km terrestrial fibre and coaxial network.
lost to all wrote:no more 10mb unlimited for 200 per month.!!!
nooooooooooooooooooooooooooooooooooooooooooooooo.......
nos_specialist wrote:WHAT THE HELL...
NOOOOOOOOOOOOOOOOOOOOOOOOO, *starts downloading the whole internet*
neilsingh100 wrote:The 49% share in TSTT will most likely be divested to the Government.
Both Columbus & C&W applied for the third mobile license and will most likely get it.
There is sure to be layoffs as C&W and Columbus combine operations.
TSTT will most likely go bankrupt in the next couple of years if it is 100% owned by the government.
skylinechild wrote:neilsingh100 wrote:The 49% share in TSTT will most likely be divested to the Government.
Both Columbus & C&W applied for the third mobile license and will most likely get it.
There is sure to be layoffs as C&W and Columbus combine operations.
TSTT will most likely go bankrupt in the next couple of years if it is 100% owned by the government.
the pressure is on - TSTT will either step up their game....or go home.
at the end of the day its all about business. TSTT will seek to make better business decisions and work ethics - ie no longer waiting 5 days to repair phone service a week to repair busted main cables or 3 weeks to remove rotten poles...
They may seek to diversify even more - ie blink vigilance blink entertainment blink on the go
they may decide to strengthen their core service
(which was sorely neglected over the years) - phone and internet
If C&W get the mobile operator license they WILL become TSTT's main competitor and minority shareholder
pretty crappy situation to be in where your have to deal with competition and STILL have to make a profit and share with them
WIN -WIN for C&W
skylinechild wrote:neilsingh100 wrote:The 49% share in TSTT will most likely be divested to the Government.
Both Columbus & C&W applied for the third mobile license and will most likely get it.
There is sure to be layoffs as C&W and Columbus combine operations.
TSTT will most likely go bankrupt in the next couple of years if it is 100% owned by the government.
the pressure is on - TSTT will either step up their game....or go home.
at the end of the day its all about business. TSTT will seek to make better business decisions and work ethics - ie no longer waiting 5 days to repair phone service a week to repair busted main cables or 3 weeks to remove rotten poles...
They may seek to diversify even more - ie blink vigilance blink entertainment blink on the go
they may decide to strengthen their core service
(which was sorely neglected over the years) - phone and internet
If C&W get the mobile operator license they WILL become TSTT's main competitor and minority shareholder
pretty crappy situation to be in where your have to deal with competition and STILL have to make a profit and share with them
WIN -WIN for C&W
Gladiator wrote:TSTT can never improve in their Unionised environment... close it down, sell it out and start up fresh.
Gladiator wrote: TSTT can never improve in their Unionised environment... close it down, sell it out and start up fresh.
EFFECTIC DESIGNS wrote:That cah help you dan. Lets just say for a moment we was back to a monopoly, one company controlling the underwater internet fiber line. It eh matter who you still using, one company will dictate the price and you would pay $1000 for dial up if they want to.
Good thing this won't happen, I not sure how the business works but Cable and Wireless would most likely become a separate company from TSTT and we might end up having more competition.
TSTT would most likely fail in the end if it were 100% government control.
This might turn out to be a good thing, I trying to look at it on the positive side here as right now flow taking real long to digitalize the whole of Trinidad so TSTT can still continue to shaft people with 256k internet. So maybe this is a good move we might so better service and prices.
That or we going back to dial up speeds. How would you guys make out with dial up speeds though?
Concerns have been expressed that Cable & Wireless Communication’s (CWC) proposed US$3 billion acquisition of regional cable provider Columbus International (also know as FLOW) could lead to a decline in telecommunications competition across the region and anti-competitive behaviour in T&T. The atmosphere was created after CWC announced in London yesterday that its board had agreed on terms to purchase 100 per cent of Columbus International Inc, the fibre-based telecommunications and technology services provider for US$1.85 billion. CWC will also assume Columbus’ US$1.17 billion in net debt.
CWC said it would finance the US$1.85 billion acquisition cost through the payment of US$707.5 million in cash and the issue of 1.55 billion new ordinary CWC shares to Columbus’ three major shareholders — John Risely, John Malone and Brendan Paddick — worth US$1.14 billion. If the transaction is approved, the three main Columbus shareholders will own about 36 per cent of CWC and collectively will be the telecommunications provider’s largest shareholders. The proposed transaction will bring together CWC, which has 5.7 million mobile, fixed line and Internet customers in Panama, the Caribbean and Seychelles, with the 700,000 residential of Columbus in the Caribbean, Central America and the Andean region. In T&T, the acquisition will mean CWC, which owns 49 per cent of majority state-owned TSTT, acquiring FLOW’s cable TV, Internet and telephone services. The CWC announcement said the completion of the transaction was conditional on it receiving regulatory approval in Barbados, Jamaica and T&T.
Speaking yesterday, Telecommunications Authority of T&T (TATT) CEO Cris Seecharan, said the local regulator was required to approve any change of ownership in licensed entities.
Seecharan said from a regional perspective, the acquisition of FLOW by CWC would reduce the number of players from three — FLOW, Digicel and the CWC-owned LIME — to two, Digicel and LIME. Seecharan said: “The region would be going from a position of vibrant competition among three players to the creation of an effective duopoly, which sometimes leads to a stagnation in competition that could impact on the affordability of service. “In T&T, the issue is more about the potential for anti-competitive behaviour as a result of cross-owner that CWC could own 49 per cent of TSTT and 100 per cent of FLOW.” He said the local regulator has embarked on an analysis of how the transaction will impact competition and how the market will be affected. He said the authority was expected to conclude that exercise by February 28, the deadline set by the parties.
Digicel concerned too
In a statement, CWC’s major competitor in the Caribbean, Digicel, said it was “naturally concerned about the clear and obvious challenges and potential issues posed by such a proposed move from a regulatory and competition perspective.” Questioned on the Digicel statement, CWC’s chief executive, Phil Bentley, said the comments were very interesting because Digicel had themselves made a bid to acquire Columbus. Bentley said: “That's a response of, if you like, a scorned lover because they didn't buy the assets. “So I think it's a bit rich of them to complain about us buying it because they wanted to buy it themselves. I would be very happy for you to make that point. It feels like sour grapes to us.” Asked whether CWC outbid Digicel for Columbus, Bentley said with a laugh: “Well, they didn't get the business. You can draw your own conclusion from that.” Asked to respond to Bentley’s allegation that Digicel had bid for Columbus, the Digicel spokesperson Antonia Graham said: “We would not comment on that.”
Customers getting choice
Told that the local telecom authority had expressed some concerns about the transaction, Bentley said CWC would be writing to the regulators on the issues of concern to them. “What I would say is that Digicel has been acquiring companies and rolling out fibre,” Bentley said. “I think we are confident that we will make the case that this is good for giving choice to customers. We think it is good for rolling out investment faster. It’s not often that people invest US$3 billion in the Caribbean and hopefully, people will see the positive side to that.”
Digicel said the proposed transaction raised a number of issues that would need to be addressed, including such matters as fairness in spectrum allocations, local loop unbundling and price bundling generally. The Jamaican-based company said: “A myriad of other likely issues will only become apparent once Digicel and other agencies and bodies have been fully appraised of the details of the proposed transaction and the likely resultant impact on the telecoms market in the region.”
Lance wrote:It's quite funny that a monopoly is forming before people's eyes and the whole of Facebook preoccupied with the fact that whatsapp introduce the blue ticks.
neilsingh100 wrote:Lance wrote:It's quite funny that a monopoly is forming before people's eyes and the whole of Facebook preoccupied with the fact that whatsapp introduce the blue ticks.
In the context of Trinidad, once C&W sells their 49% share in TSTT there is no monopoly and is a good development since we would have strong competition among C&W, TSTT & Digicel.
Lance wrote:neilsingh100 wrote:Lance wrote:It's quite funny that a monopoly is forming before people's eyes and the whole of Facebook preoccupied with the fact that whatsapp introduce the blue ticks.
In the context of Trinidad, once C&W sells their 49% share in TSTT there is no monopoly and is a good development since we would have strong competition among C&W, TSTT & Digicel.
See comment #18.
Let's see if TATT steps up and makes sure that adequate consideration is given.
neilsingh100 wrote:Lance wrote:neilsingh100 wrote:Lance wrote:It's quite funny that a monopoly is forming before people's eyes and the whole of Facebook preoccupied with the fact that whatsapp introduce the blue ticks.
In the context of Trinidad, once C&W sells their 49% share in TSTT there is no monopoly and is a good development since we would have strong competition among C&W, TSTT & Digicel.
See comment #18.
Let's see if TATT steps up and makes sure that adequate consideration is given.
There are three main submarine cables coming into Trinidad, one owned by Columbus, the other by Digicel and third by a consortium so don't see an issue here.
neilsingh100 wrote:Lance wrote:neilsingh100 wrote:Lance wrote:It's quite funny that a monopoly is forming before people's eyes and the whole of Facebook preoccupied with the fact that whatsapp introduce the blue ticks.
In the context of Trinidad, once C&W sells their 49% share in TSTT there is no monopoly and is a good development since we would have strong competition among C&W, TSTT & Digicel.
See comment #18.
Let's see if TATT steps up and makes sure that adequate consideration is given.
There are three main submarine cables coming into Trinidad, one owned by Columbus, the other by Digicel and third by a consortium so don't see an issue here.
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