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Vodafone eyes C&WW [Newcastle Journal (England)]
(Newcastle Journal (England) Via Acquire Media NewsEdge) VODAFONE is mulling a potential takeover bid for struggling telecoms firm Cable & Wireless Worldwide.
In a brief statement to the stock market, Vodafone said it was in the early stages of evaluating the merits of a deal for C&WW, which sells telecoms and internet services to major UK businesses.
Vodafone is thought to need around pounds 700m to buy C&WW, which is also thought to be in the sights of private equity firm Apax.
The interest has been spurred by the collapse in CWW"s share price since it split from Cable & Wireless"s Caribbean-based telecoms arm in 2010.
It has been impacted by the squeeze on government spending and the weak economy, leading it to report heavy losses for the six months to September 30 and warn of no dividend payments in order to bolster its balance sheet.
Former Vodafone executive Gavin Darby, who in November became the company's third chief executive in around a year, is expected to provide early details of a turnaround plan alongside a trading update on Thursday. Shareholder anger over the company's plight has been fuelled by the estimated pounds 20m pocketed in bonuses by former bosses John Pluthero and Jim Marsh before trading started to unravel. Cable provides high-speed telecoms services to the police and companies including Tesco and would be attractive to Vodafone as the mobile phone firm looks to grow its corporate division at a time of slowing consumer growth.
Cable & Wireless shares jumped 27% to 25.5p - giving it a market value of just under pounds 700m - after Vodafone confirmed its interest.
The mobile phone company, which was sitting on a huge cash pile of pounds 7bn at the end of September, said any offer for C&WW would be paid in cash.
(c) 2012 ProQuest Information and Learning Company; All Rights Reserved.
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