Liberty Global is in talks with Cable & Wireless Communications about a potential deal to unite two companies backed by billionaire cable pioneer John Malone and extend Liberty's reach in the Caribbean.
Cable & Wireless, valued at slightly more than £3 billion as of yesterday's close, said talks were under way regarding a possible cash-and-stock bid by Liberty.
It said they were not certain to result in an offer.
Liberty Global confirmed the discussions. According to UK law, it has until November 19 either to make an offer or to announce that it does not intend to buy the company.
Based in London, Cable & Wireless describes itself as "the go-to player in the Caribbean and Latin America". It introduced the first telegraph services to the region in the 1870s, the company says on its website.
The Wall Street Journal first reported the talks last night, citing unnamed people familiar with the matter.
It said the deal could be worth more than $5 billion and could be reached by early November.
Liberty is back on the hunt for acquisitions less than a month after it abandoned talks with Vodafone about a swap of business assets in Europe's converging mobile phone, broadband and TV markets. The companies could not agree on valuations.
Malone, the US 'King of Cable', acquired a stake of about 13% in Cable & Wireless this year after the company bought Columbus International, a privately owned fibre-based telecoms provider that he backed.
Liberty Global, the owner of pay-TV company Virgin Media, also raised its stake in ITV to 9.9% in July but said it did not intend to make an offer for Britain's biggest free-to-air commercial TV firm.
Cable & Wireless had about 3.7 million mobile subscribers, 1.1 million fixed-line subscribers and 388,000 broadband customers as of March 2014, according to its website.
Cable & Wireless is one of Denis O'Brien's Digicel's main rivals in the Carribean market.
A deal would put CWC in a strong position in the market to compete against Digicel and America Movil, which is owned by Mexican Carlos Slim - the world's richest man.
Digicel abandoned plans to float on the New York Stock Exchange earlier this month.
