Deadline extended for Cable&Wireless Worldwide bidding

12 March 2012 | Kavit Majithia

Vodafone has been given until March 29 2012 to table a bid to acquire Cable&Wireless Worldwide (CWW), an extension of over two weeks from its original deadline of today.

Vodafone confirmed its interest in the company one month ago, and it is generally standard practice to “put up or shut up” within four weeks, in relation to any acquisition interest.

After Tata Communications also confirmed its interests in a possible acquisition, it was thought Vodafone would move fast to combat any interest from the Indian-based operator. However, it appears CWW has agreed to an extension to the four-week takeover deadline, indicating the two UK companies have held talks and there is an expectation on the part of the target company that an acceptable offer is likely to be made. Tata has also been given the same deadline.

Analysts have suggested, despite poor financial results, CWW’s infrastructure base and network reach is proving an attractive selling point for the larger telecoms operators. CWW’s relatively low price, given poor financial performance in the past year provides further merits for an Indian company like Tata, who has registered interest in expanding its international footprint for its wholesale operations. Registered interest from the two global giants has meant shares in CWW have rose sharply, taking the company’s equity up to $1 billion for the first time since August 2011, and its market value has almost doubled since last month.

CWW’s latest line does indeed suggest Vodafone is in pole position to secure the deal, but Tata attempting to raise over $2 billion in debt has not gone unnoticed by financial analysts. Its bid, however, may be restricted by the Indian government who could curb how much the company can invest.