CWW shareholder doubt could jeopardise sale to Vodafone

04 May 2012 |


A major shareholder of CWW appears to be refusing to back the company’s proposed £1 billion sale to Vodafone raising doubts that the deal will be completed.

Orbis Investment Management, which has a 19% share of CWW, has declined to “give an irrevocable undertaking to back the Vodafone bid because we do not believe it reflects CWW's true value”.

Under UK law, Vodafone requires 75% of shareholders to back the deal. Although Orbis has yet to state it will vote against the deal, its comments suggest that it may stand in the way of the Vodafone deal: “We are evaluating our options, including remaining a minority shareholder in CWW as we did in 2010/11 in Océ after Canon's bid, knowing very well the risk that Vodafone may withdraw its offer and CWW's share price may fall in the short term.”

Vodafone agreed to purchase CWW over two weeks ago following a prolonged offer period which also saw interest from Tata Communications.

Vodafone’s proposed acquisition of CWW was expected to spell the end of low prices and bespoke solutions for the fixed-line operator’s corporate enterprise customers. Analysts have warned that Vodafone could seek to impose a more profit-driven culture at CWW as part of a strategy to bolster revenues.