The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Union representatives for the Bahamas Telecommunications Company’s (BTC) line staff say the potential takeover of its controlling shareholder was “always our fear” from the moment the 2011 privatisation was completed.

Bernard Evans, the Bahamas Communications and Public Officers (BCPOU) president, told Tribune Business that the union and its members were still “digesting” news that Cable & Wireless Communications (CWC) was in talks to be taken over by John Malone’s Liberty Global.

He disclosed, though, that the union had feared CWC was merely “propping up its business” via the $207.5 million purchase of a majority equity stake in BTC until its shareholders could locate an exit route.

“We’re still trying to digest it and get a full understanding of it,” Mr Evans said, in reaction to confirmation that CWC was in acquisition talks with John Malone’s Liberty Global. “We don’t want to shoot off our mouths just yet, and want to get a full appreciation for what it means.”

He added, though, that CWC ‘flipping’ its BTC stake to another buyer or being acquired itself “was always our fear” from the moment the privatisation process completed in April 2011.

Noting that CWC had, at that time, just demerged from Cable & Wireless Wordwide (CWW), the UK business, Mr Evans told Tribune Business: “We always felt that CWC was winding down, and the [BTC] purchase was only propping up their business until they got out of the business.

“It was always the fear we had. But we didn’t think it would happen this soon.”

Asked whether the Liberty Global talks, coming so soon after BTC’s recent downsizing and the potential award of a second mobile licence to Cable Bahamas, would further undermine morale among staff, Mr Evans replied simply: “it never stops.’

The selection of Cable Bahamas as the preferred bidder for the Bahamas’ second mobile licence could not have come at a worse time for CWC given the Liberty Global interest.

This is because it will sharply undermine the value of that controlling interest in BTC, given that the current mobile monopoly generates almost 75 per cent of its revenues and the bulk of its profits.

There is no guarantee that CWC and Liberty Global will be able to reach terms on a takeover agreement that could potentially be worth $5.5 billion. The talks were revealed last week by the Wall Street Journal, with both sides said to be wanting an agreement by the time they reveal their financial results next month.

Mr Malone, widely regarded as the pioneering ‘King of Cable TV’, already holds a 13 per cent equity stake in CWC after the latter last year acquired the Columbus International business in which he held stock.

That move now looks increasingly like a deal to get ‘the camel’s nose under the tent’, and several industry insiders speculated at the time whether the Columbus deal was merely a prelude to Mr Malone and Liberty making a play for CWC.

It is unclear where BTC would fit into Liberty’s plans should Mr Malone be successful in acquiring his quarry. The billionaire investor, though, already has strong Bahamas connections through Sampson Cay, his private island in the Exumas.

Liberty Global already has cable operations in Puerto Rico and Chile, and a CWC acquisition would fit well with its ambitions for the Western Hemisphere - particularly in Latin America and the Caribbean.

It recently created a separate stock, called LiLAC, for its Caribbean and Latin American holdings. It is thought that this is the entity CWC will be merged into if a deal is done.