Cable & Wireless Communications Plc (CWC) announced in a press release, published by the London Stock Exchange, that it is in discussions with Liberty Global Plc for a possible offer of cash and shares to acquire CWC.
The acquisition, if it pushes through, would broaden Liberty Global's presence in the Caribbean and Latin America.
Liberty Global confirmed CWC's announcement in its own press release that it is indeed in talks of a possible acquisition of CWC.
The company though cleared that their confirmation is not an announcement of a firm intention to make an offer under the Rule 2.7 of the City Code of Takeovers and Mergers.
Both companies said in their respective press releases that Liberty Global has until 5 p.m. of November 19, 2015, to either announce a firm intention to make an offer to CWC or announce that it does not intend to make an offer.
In accordance with Rule 2.6 of the City Code of Takeovers and Mergers, the deadline to make the announcement can be extended with the consent of the Takeover Panel.
The New York Times adds that John C. Malone, a billionaire who control's Liberty Global, has a 13 percent stake in CWC.
His stake is worth £2.6 billion, or about $4 billion based on CWC's market capitalization on Thursday, October 22, 2015.
The New York Times adds that the deal, if it is completed, will expand Liberty Global's presence in the Caribbean and Latin America.
CWC provides pay television, broadband, mobile and traditional landline telephone services in the Caribbean, Monaco, Panama, and the Seychelles.
CWC also has about 6 billion subscribers across its services as of the end of March, according to The New York Times.
The company posted revenue of $1.8 billion in its fiscal year, ending on March 2015.
Neil Campling, a media analyst at Aviate Global, told Bloomberg that Malone would "create another oligopoly" if the deal pushes through.
"He's going to create another oligopoly in Latin America, after doing this in the U.S. and then in Europe," he said.
Bloomberg adds that Liberty Global created a tracking stock called LiLAC in July for its existing assets in Latin America and the Caribbean.
This move showed Malone's intention to get bigger in the region.
