By Telecom
Lead Team: Wireless service provider Vodafone is mulling acquiring the
second-largest fixed-line telecom network operator Cable & Wireless
Worldwide (C&WW) in the U.K.
C&WW,
which has issued a string of profit warnings since its March 2010 demerger from
Cable & Wireless Communications and saw its stock price lose 70 per cent of
its value over the last 12 months, was worth around £700 million on 10 January
but its stock soared by 31 per cent to 25 pence in early trading today
following the news of Vodafone’s potential interest.
The Sunday Times newspaper reported that private equity firm
Apax Partners is also evaluating bidding for C&WW.
C&WW
specializes in providing communication networks and services to large
corporates, governments, carrier customers and resellers. Its services include
managed voice, data and IP-based services and applications across the UK, Asia
Pacific, India, Middle East & Africa, Continental Europe and North America.
It owns the
UK’s biggest fiber network dedicated to business users of telecommunications
and has an international cable network spanning approximately 425,000km in
length. It reaches across the Atlantic Ocean, through Europe and on to India
and throughout Asia. In conjunction with satellite, C&WW connects every
continent and more than 150 countries.
But since
the demerger, it has found it difficult to compete against its larger rivals
British Telecom, AT&T, Telefónica and Vodafone.
Vodafone
already pays C&WW for backhaul services, so any offer can bring int saving
on the purchase price, say analysts.
“Vodafone
regularly reviews opportunities in the sector and confirms that it is in the
very early stages of evaluating the merits of a potential offer for CWW. Any
offer, if made, will be in cash, but Vodafone reserves the right to change the
specie of consideration,” said Vodafone.
Other
potential buyers could be Sir Richard Branson’s Virgin Media.