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Mergers and Acquistions News

Categories: Telecoms

February 24th 2011, 17:00PM

UK-based Cable & Wireless Communications (CWC) has said it will sell its telecoms business in Bermuda to The Bragg Group, a Canadian firm known mainly for its production of frozen blueberries, for $70 million (£43 million).

The decision to sell Cable & Wireless Bermuda to EastLink, the telecoms division of Bragg and the largest, privately-held cable company in Canada, marks the divestment of CWC's Bermudan operations.

Parent company Bragg is a frozen food firm that first developed a separate telecoms operation in Nova Scotia in the 1970s.

The move may seem surprising because as little as two weeks ago, CWC acquired a 51 per cent stake in the Bahamas Telecommunications Company (BTC), the exclusive mobile operator in the Bahamas, for $210 million.

CWC tempered in a trading note at the time that its Caribbean business had been badly affected by a drop in tourist spending, brought on by several hurricanes in the region.

However, CWC's chief executive, Tony Rice, said: "Bermuda does not fit our business model as it is not a full-service operation, while BTC provides excellent opportunities and a strong strategic fit with our Caribbean business."

"The Bermuda divestment is consistent with CWC's strategy to reshape its portfolio and develop the business around full-service telecommunications operations in a series of core regional hubs."

CWC also announced a share buyback programme of as much as $100 million to return capital to shareholders.

The transaction is expected to complete by the end of March.ADNFCR-1833-ID-800426549-ADNFCR

 

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