Natalie Parkinson
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Natalie Parkinson in Mergers & Acquisitions,

Liberty Global to buy Cable & Wireless for $5.3 bln

Cable tycoon John Malone's Liberty Global PLC agreed to buy Caribbean cable operator Cable & Wireless Communications PLC for $5.3 billion, strengthening the acquisitive company's foothold in an emerging market ripe for additional consolidation.

The companies said in a statement Monday that the stock offer is valued at 78.04 pence a share--a 6% premium to Cable & Wireless's Monday closing price of 73.54 pence in London, where it trades.

The deal also includes a special dividend of 3 pence a share that will be paid when the transaction closes, bringing the total consideration to 81.04 pence per share. Liberty Global said the full offer represents a 40% premium to Cable & Wireless' closing share price on Oct. 21, the day before The Wall Street Journal first reported that the companies were in talks. Including net debt, the deal is valued at $8 billion.

Liberty Global shares are falling today. What are your forecast for long-term period?