23 April 2012
Vodafone has agreed to acquire Cable&Wireless Worldwide for £1.04 billion, following a drawn out offer period which also saw interest from Tata Communications.
The acquisition is expected to
strengthen Vodafone Group’s enterprise business in
the UK and internationally. It will also provide cost saving
opportunities for the UK telecoms group. CWW’s
assets include 20,500km of UK fibre and an international cable
Under the agreement, CWW
shareholders will receive 38 pence per share, representing a
premium of 92% on the company’s share price before
the offer period.
had been aching for a sale since Vodafone first declared its
interest in February following a series of poor financial
results. The company had experienced a
loss of almost two thirds of its market value
since the split of Cable&Wireless Group in March 2010.
"The offer from Vodafone
announced today will enable shareholders to crystallise a
value, in cash, that represents a significant premium to recent
trading levels and avoid exposure to the risks inevitably
presented by executing a medium-term improvement strategy,"
said John Barton, Chairman of CWW.
CWW’s CEO and
ex-Vodafone chief, Gavin Darby, had
set out a strategy to refocus the business in an interim
management statement on February 16, days after Vodafone
declared its interest. At the time he said that
under-investment had left the business with an inefficient cost
base and insufficient capacity to participate in the high
growth hosting market.
The offer period had previously
been extended twice to allow time for potential bidders to
propose a deal. The latest extension granted Vodafone four more
days to make a bid, but with Tata having failed to reach an
agreement on the previous deadline of April 19, the company
knew it was the only bidder.
CEO, Vittorio Colao, said in a statement today that he was
pleased to have reached an agreement with the CWW board, which
unanimously recommended the offer, and highlighted the benefits
of the deal.
"The acquisition of
Cable&Wireless Worldwide creates a leading integrated
player in the enterprise segment of the UK communications
market and brings attractive cost savings to our UK and