Cable & Wireless Agrees To Vodafone Offer
April 23 2012 - 2:53AM
Dow Jones News
Cable & Wireless Worldwide PLC (CW.LN) said Monday that it
has agreed to a GBP1.04 billion takeover bid from mobile
communications giant Vodafone Group PLC (VOD.LN).
The cash offer of 38 pence a share comes a few days after
India's Tata Communications Ltd. (TCL) withdrew its interest in
Cable & Wireless.
"The acquisition of Cable & Wireless Worldwide creates a
leading integrated player in the enterprise segment of the U.K.
communications market and brings attractive cost savings to our
U.K. and international operations," Vittorio Colao, chief executive
of Vodafone, said in a press statement Monday.
For Vodafone, the acquisition would support margins and improve
network quality in the U.K. It would also support the global
enterprise business, in which Vodafone is currently investing,
according to recent research from brokerage firm Sanford C.
Bernstein.
Vodafone had until 1100 GMT on Monday to make a bid for C&W
Worldwide or walk away after the U.K. Takeover Panel on Thursday
extended the deadline for a third time.
Tata Communications said after the close of trade Wednesday that
it wouldn't make an offer for C&W Worldwide after failing to
agree on a price with the U.K.-based company. The disappointing
news pushed C&W World's shares down as much as 24% during
Thursday's trade on the London bourse, following widespread press
reports suggesting Tata Communications had raised finance for the
bid.
On Feb. 13, Vodafone said it was in the very early stages of
evaluating a takeover bid for C&W Worldwide--which counts
U.K.-based telecommunications operator BT Group PLC (BT.A.LN) as
one of its biggest rivals--following press speculation. A few weeks
later, Tata Communications said it too was mulling a bid for the
company.
C&W Worldwide owns the U.K's biggest fiber network dedicated
to businesses. It also has an international cable network that
reaches across Europe, India and throughout Asia. But it has had a
tough time since its spinoff from parent Cable & Wireless PLC
in 2010, suffering a sliding stock price and several management
changes.
-By Jessica Hodgson and Lilly Vitorovich, Dow Jones Newswires; +
44 207 842 9373; jessica.hodgson@dowjones.com
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