Denis O’Brien's Digicel considers €1bn Orange Dominicana bid

Digicel believed to be preparing bid for the Dominican Republic operations of Orange

Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group Inc; Jim Rogers, chairman of Duke Energy Corporation; and Denis O’Brien, chairman of Digicel Group, during a taping of CNN’s Fareed Zakaria CNN-GPS show at the annual Clinton Global Initiative during the week in New York City. Photograph: Ramin Talaie/Getty Images

Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group Inc; Jim Rogers, chairman of Duke Energy Corporation; and Denis O’Brien, chairman of Digicel Group, during a taping of CNN’s Fareed Zakaria CNN-GPS show at the annual Clinton Global Initiative during the week in New York City. Photograph: Ramin Talaie/Getty Images

 


Digicel, the Caribbean mobile phone network controlled by Denis O’Brien, is understood to be preparing an estimated €1 billion bid for the Dominican Republic operations of Orange.

If successful, it would put O’Brien back in direct competition with Mexican billionaire Carlos Slim, the world’s richest man, whose America Movil is the biggest mobile operator in the country. Mr O’Brien and Mr Slim have been rivals in the wider region’s telecoms industry for years.

Orange Dominicana, which has about three million subscribers and annual revenues of €450 million, has been put up for sale by its French parent company, Orange, formerly known as France Telecom.

Bloomberg yesterday said Digicel was one of five companies preparing a bid, although it did not name the other four. Cable & Wireless, a competitor of Digicel’s in several Caribbean markets, would also be expected to bid.


Debt pile
Stephane Richard, the chief executive of Orange, confirmed to analysts in July that it was exploring a sale of its Dominican unit. The company wants to free up cash to help pay down some of its €39 billion debt pile.

Olivier Emberger, a spokesman for Orange, told Bloomberg this week only that its Dominican unit was “under review”.

“As is usual practice for such a review, this includes a process in which potential buyers are invited to submit offers,” Mr Emberger said.

“The group emphasises that the sale of its activity in the Dominican Republic is only one of several options available and that no decision has been made in this respect.”

Digicel was unavailable for comment yesterday when contacted yesterday.

Orange has about 38 per cent of the Dominican Republic’s mobile market, while America Movil’s Claro has just over half the market. Orange’s subscriber base is growing at about 5 per cent annually.

Digicel already dominates the mobile phone market in neighbouring Haiti, which along with the Dominican Republic comprises the island of Hispaniola

Digicel appears to have the financial firepower to pull off a deal for Orange Dominicana. It raised more than $1 billion in a bond offering earlier this year, and is estimated to have a cash pile of a further €1 billion.


Mobile licence
The money had been earmarked for use in Myanmar, where Digicel unsuccessfully applied for a mobile licence.

Digicel has more than 13 million customers across 30 Caribbean and Pacific markets. It was primed to enter several central American markets three years ago, but sold its operations to Mr Slim’s America Movil. This was part of a deal that also saw Mr Slim agree to sell to Digicel the operations of Claro in Jamaica, Digicel’s main market.

Separately, Mr O’Brien told Bloomberg television yesterday that he wants to bring the Ryder Cup golf tournament to his Spanish golf resort, PGA Catalyuna near Barcelona.

“We’re going to go for the Ryder Cup,” Mr O’Brien said. “We’ve spent a lot of money on infrastructure, because, unlike a lot of developers in Spain – they try and do it piecemeal – we did the whole lot in one go.”