Vodafone eyes bid for Cable & Wireless Worldwide
Vodafone Group, the world's largest mobile phone company, said Monday it is considering a possible bid for Cable & Wireless Worldwide, causing shares in the telecoms network provider to jump 27 percent.
Responding to reports in weekend newspapers, Vodafone said it was "in the very early stages of evaluating the merits of a potential offer for CWW."
Vodafone said any offer would most likely be made in cash but said there was no certainty that an offer would be made.
The Sunday Times suggested that Vodafone might offer 700 million pounds ($1.1 billion) for Cable & Wireless, which had a market value of nearly 550 million pounds based on Friday's closing price. The newspaper said Apax Partners was also a potential bidder.
Vodafone now has until March 12 to either announce a firm intention to take over the company or be barred from launching a bid for six months.
C&W Worldwide shares have fallen by 74 percent in the last year, closing at 19.75 pence on Friday. Shares changed hands at 26.7 pence in the first minutes of trading on Monday.
The company has been plagued by management chaos, with three changes at the top in less than a year. The current chief executive, Gavin Darby, previously was Vodafone's U.K. CEO.
The C&W Worldwide cable network serves 150 countries directly or through local partners. It also operates a U.K. fiber network serving businesses.
C&W Worldwide, created in 2010 by a demerger, supplies telecoms services to businesses and public sector bodies. The other half of the demerger, Cable & Wireless Communications, supplies broadband, mobile and other communications services to consumers and small- and medium-sized businesses in the Caribbean, Panama, Macau and Monaco.
C&W Worldwide traces its origins from the development of telegraphy in the 19th century. The Cable & Wireless name dates from 1934, reflecting the company's move into radio, as well as cable links.