Saturday, April 20, 2024

THE HOYOS FILE: Mere pawns in a global game


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I found myself suddenly very grateful to John C. Malone late on Thursday afternoon. In case you’ve never heard of Malone, he now owns 13 per cent of the telecoms company through which people in Barbados have a roughly 50 per cent chance of making mobile calls, plus 100 per cent of landline calls, and a presumably growing percentage of those watching cable television.

Of course, I am talking about Cable & Wireless Communications plc (CWC), and the reason I am grateful to Malone is because, by considering buying up the company he just sold his own company to (you have to focus) he helped take my own focus off the dreary battle between Trinidad and Brazilian interests for control of yet another Barbados-based public company.

I mean the Banks Holdings Limited (BHL) bidding war that is getting stranger by the minute. Let’s see: Massy Holdings selling to SLU Beverages, which it obviously knew would trigger a takeover bid, regardless of whether it knew who owned SLU at the time; on top of that, Massy’s sale of its 20 per cent stake in BHL seeming to have “catspraddled” the board of directors; the BHL board seemingly at sea as the negotiations to start the process were being made being the scenes (SLU with Massy Holdings); and did I mention ANSA McAL? Once more, good old ANSA is stepping up to the plate after the horse has started to leave the stable, with a higher offer.

So at one level it reminds me of that bruising battle for Barbados Shipping & Trading (BS&T), where ANSA came in after the action started, guns ablazing. Alas, ’twas not to be. All they did was make the then Neal & Massy Holdings pay almost double, in hard cash, for the BS&T shares they had hoped to acquire via a share swap. Without knowing any details, I would not be surprised if this remains a sore spot with now Massy Holdings.

See, if they were BFFs, don’t you think when Massy got that call from AmBev (“Senors, we wish to buy your ‘acciones’”), the next call would have been to ANSA (“Norman, Gervase here…”). Don’t worry, I had to look up ‘acciones’, too. But nobody has so far said anything like that happened, and ANSA McAL’s equally sudden purchase of BWPL Holdings’ shares also seems to have knocked out the stumps of the BHL board.

And where is Heineken International in all of this? In Jamaica, that company just bought out Diageo, the majority shareholder in Desnoes & Geddes, so now owns 74 per cent of the Red Stripe and Dragon beer brands. It is also said to be a 20 per cent owner of Carib Beer, and ANSA has the licences to produce Heineken beer. In fact, in its offer document, ANSA said “our partnership with Heineken International B.V. provides access to a global network and technical expertise.”

So now the stage is set and we await any new developments. But for all the drama and sudden acquisitions left, right and centre, the only thing really interesting about the BHL takeover “war” is the existence in the background of the international players with vested interests, AB InterBrew, which owns AmBev, and Heineken International. We had long ago lost Banks Holdings as a majority locally-owned entity, if it ever really was.

So, thanks, Malone, for the diversion. For the record, here is a brief sentence from the CWC press released issued on Thursday: “CWC is in discussions with Liberty Global plc regarding a possible shares and cash offer for CWC”. It noted that there was no certainty that any firm offer would be made, adding: “This statement is being made by CWC without the prior agreement or approval of Liberty Global.” It also noted that, under the British Takeover Code, Liberty Global would have until November 19 to say if it was going to make a firm offer for CWC or not.

As for me, I had previously wondered how long it would have taken Malone to make his move, but then forgot all about it. Malone, an American by the way, is one of the world’s biggest media/telecom players. Here is an abridged version of how his holdings were described in the CWC offer document:

“Malone has a very large and diverse portfolio of investments, including holdings of between two per cent and five per cent of the issued shares and between 25 per cent and 45 per cent of the voting interests” in Liberty Media Corporation, Liberty Global plc, and Liberty Trip Advisor Holdings Inc., among several others. It noted that Liberty Media Corporation owns interests in a broad range of media, communications and entertainment businesses, including Charter Communications and Live Nation and minority equity investments in Time Warner Cable, Time Warner Inc. and Viacom. As for Liberty Global plc, it is said to be “the largest international cable company with operations in 14 countries; its consumer brands including Virgin Media, UPC, Unitymedia, Kabel BW, Telenet, VTR, and Liberty Puerto Rico”.

According to the New York Times (NYT) edition of Thursday last week: “Malone is behind another big deal pending in the United States [where regulators] are scrutinising Charter Communications’ pair of deals for Time Warner Cable and Bright House Networks. Charter Communications is backed by Malone’s Liberty Broadband, which is a separate company from Liberty Global”. Added the NYT: “In July, Liberty Global announced that it was starting a new tracking stock called LiLAC to ‘exploit organic growth potential’ for its operations in Latin America and the Caribbean.

So, if Malone does decide to make that offer, it may be a case that “LIME” “flowed” into a new colour – “LiLAC”. So maybe there is a future for CWC as part of LiLAC. Who knows? One thing I do know for sure, though, is that our businesses in Barbados are now mere pawns in a global game, to be acquired or annihilated as other much bigger players choose. The ball is no longer in our court, if it ever was.


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