Vodafone agrees £1.04 billion offer for CWW
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 network.
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.
CWW’s shareholders 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.
Vodafone Group’s 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 international operations.”