France's Niel snaps up Monaco Telecom for €322

France's Niel snaps up Monaco Telecom for €322 million

Friday 25 April 2014

Deal marks Cable & Wireless Communications' second attempt to divest its Monaco Telecom stake.


French businessman Xavier Niel has agreed to acquire a 55% stake in Monaco Telecom from Cable & Wireless Communications for €321.8 million (US$445 million).

Niel, founder and owner of France's Iliad and its disruptive mobile operator subsidiary Free Mobile, brokered the deal through a private investment vehicle, Cable & Wireless announced on Friday. The transaction is expected to close in mid-May.

The deal marks a second attempt by Cable & Wireless to offload its shares in Monaco Telecom. In late 2012 it agreed to sell its Islands division and a 25% stake in Compagnie Monegasque de Communication SAM (CMC), the holding company for its 55% stake in Monaco Telecom, to Batelco for $680 million. It announced the completion of the deal in April 2013, but at the end of the year it unwound the Monaco Telecom portion of the deal deeming it too complicated to pursue; Batelco paid back $100 million as a result.

The $445 million Niel has agreed to pay for Monaco Telecom "reflects [its] strong financial performance and market position," Cable & Wireless said in a statement.

It added that CMC reported revenue of US$218 million in the full year to 31 March 2013, pretax profit of $52 million and EBITDA of $74 million. However, it did not provide comparative figures. In its most recent results announcement, for the six months to 30 September, revenue fell to $120 million from $124 million in the year-ago period, but EBITDA rose to $42 million from $40 million and its margin improved to 35%.

Cable & Wireless will publish its full year 2013/14 results next month.

As of the end of September, Monaco Telecom had around 35,000 mobile customers and 34,000 fixed-line and 17,000 broadband customers.

Cable & Wireless has already receive legal and regulatory clearance for the deal in Monaco, but it still requires the approval of its shareholders.

"Over 10 years under our management and in partnership with the Principality [of Monaco] we have enhanced the services available to the residents and businesses of Monaco and achieved good returns," said Phil Bentley, CEO of Cable & Wireless Communications.

"However, as we concentrate our business on the Caribbean and Latin America, we have taken this opportunity to crystallise the value we have created," he added. "Our Miami hub is now operational and with our balance sheet strength we intend to deploy the funds received in pursuing growth opportunities in our core region."

"The only way of discovering the limits of the possible is to venture a little way past them into the impossible."