CWC to Sell Monaco Unit to Batelco for $680 Million
Cable & Wireless Communications Plc (CWC) agreed to sell its Monaco and islands businesses to Bahrain Telecommunications Co. (BATELCO) for $680 million. CWC shares rose the most in more than two months.
The state-controlled company known as Batelco will acquire CWC’s businesses in the Maldives, Channel Islands, Isle of Man, Seychelles, South Atlantic and Diego Garcia, and 25 percent of Compagnie Monagesque de Communications SAM, it said in a statement on its website. Batelco has an option to buy the remaining 75 percent in Compagnie Monagesque for an additional $345 million within 12 months of closing the original deal.
CWC, which is still in talks to sell its Macau unit to partner Citic Telecom International Holdings Ltd. (1883), is nearing the end of disposals meant to concentrate its holdings around Latin America and the Caribbean, Chief Financial Officer Tim Pennington said in an interview. Once the second phase of the Monaco transaction is completed and Macau is sold, CWC will have flexibility to make more acquisitions in the region, he said.
“Essentially, we will be that regional business,” Pennington said. “It’s extremely good for us. It’s part of the next step of our evolution.”
CWC shares jumped as much as 7 percent, the biggest intraday gain since Sept. 17 in London, where the company is based. The stock was up 5.2 percent at 36.50 pence as of 10:07 a.m., giving CWC a market value of 923 million pounds ($1.48 billion).
Akira Partners and JP Morgan Chase & Co. were financial advisers on the deal.
CWC was formed in 2010 in a split that created Cable & Wireless Communications and Cable & Wireless Worldwide, a fixed- line company that was acquired by Vodafone Group Plc (VOD) this year.
Batelco said it plans to raise as much as $1 billion of debt through a bond issue and a term-loan facility to finance the transaction. The company has appointed Citigroup Inc. and BNP Paribas SA to arrange the financing.
Pennington said that the company is still negotiating with Citic Telecom about its Macau business, and he believes others would be interested in the asset. He declined to say when the talks might conclude. Citic may pay as much as $750 million for CWC’s stake in the Macau phone operator, two people familiar with the matter said in October.
“We think that Macau is an extremely attractive business,” Pennington said. “It’s got a great profile. It’s got great operating metrics. We think lots of people are interested.”