Bid fears as top telco investor puts up a fight
(City A.M. (UK) Via Acquire Media NewsEdge) SHARES in Cable & Wireless Worldwide dropped by six per cent yesterday morning as investors agonised over the prospect of Vodafone's £1.04bn takeover bid.
Orbis Investment Management, CWW's biggest shareholder with a 19 per cent stake, reiterated its discontent with Vodafone's 38p per share offer for the ailing cable company.
When Vodafone last week tabled its bid for CWW, claiming to have irrevocable undertakings or letters of intent from 18.6 per cent of shareholders, Orbis said it could not commit to backing the deal because it did not "reflect the value inherent in CWW".
The fund manager has since said that it could fight to remain a minority shareholder in a Vodafone-owned Cable & Wireless.
It added that it knows "very well the risk that Vodafone may withdraw its offer and CWW's share price may fall in the short term."
Vodafone's offer stipulates that in return for total control of the company, at least 75 per cent of CWW's shareholders must approve the deal.
The telecoms giant has said it will not raise its offer price but it reserves the right to implement a standard takeover procedure, which requires 50 per cent approval and would allow minority shareholders to remain.
Orbis is unlikely to be able to hold out unless other shareholders take its side, but the fund manager is on familiar ground. It refused to tender its 10 per cent stake in printer maker Océ to camera giant Canon, remaining a minority shareholder after the €8.60 a share takeover in January 2010.
Orbis then sold its holding to Canon in December 2011 for an undisclosed sum, understood to be a significant mark-up on the original offer price.
Cable & Wireless Worldwide PLC
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