Cable & Wireless Communications Plc agreed to sell its 55 percent stake in Monaco Telecom to French entrepreneur Xavier Niel for 322 million euros ($445 million) as it focuses on the Caribbean and Latin America.
The price is 8.4 times the holding company Compagnie Monegasque de Communication’s proportionate earnings before interest, taxes, depreciation and amortization based on the year through March 2013, Cable & Wireless said in a statement today. It acquired the stake in 2004 for 162 million euros.
After the sale’s completion, Cable & Wireless will generate all of its revenue from the Caribbean and Latin America, with the exception of the Seychelles. The disposal will reduce borrowings and boost “strategic and financial flexibility,” the company said. Including proceeds from the sale, pro-forma net debt at Sept. 30 would have been $82 million.
“With our balance sheet strengthened, we intend to deploy the funds received in pursuing growth opportunities in our core region,” Phil Bentley, chief executive officer of Cable & Wireless, said in the statement.
Niel is founder and largest shareholder of Paris-based telecommunications provider Iliad SA. The billionaire is looking at investments and acquisitions for phone companies in Europe, people familiar with the plans said in October. In France, Niel took market share by offering mobile-phone plans for as low as 2 euros a month and selling triple-play packages combining TV, landline and Internet services.
Cable & Wireless shares rose 0.3 percent to 52.75 pence at 9:51 a.m. in London, valuing the company at 1.33 billion pounds ($2.24 billion). The stock has gained 23 percent in 12 months.
The company had previously agreed to sell part of the stake to Bahrain Telecommunications Co. in a deal valued at $680 million, which also included CWC’s businesses in the Maldives, Channel Islands, Isle of Man, Seychelles and other assets.
At the end of last year, the companies unwound the Monaco portion of the deal after the principality’s government -- which owns the other 45 percent of the Monaco business -- raised concerns about how state-controlled Batelco would run the business.
Monaco Telecom is the market leader and only full-service telecommunications provider in the Mediterranean principality and also has a 36.75 percent stake in Telecom Development Company Afghanistan Ltd., a leading operator in that country, according to the statement.
Evercore Partners Inc., JPMorgan Chase & Co. and Akira Partners LLP were advisers on the deal.