Home Tech/AITech news Vodafone Closes to Buy Cable & Wireless

Vodafone Closes to Buy Cable & Wireless

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Vodafone Group Plc is nearing an agreement to acquire Cable & Wireless Worldwide Plc, adding a U.K. fixed-line network to its mobile-phone system.

The world’s largest wireless operator is offering between 35 pence and 39 pence a share.

Cable & Wireless closed at 32 pence in London on April 20, giving the company a market value of 879 million pounds, It has gained 62 % since Vodafone publicly expressed interest Feb. 13.

Vodafone became the sole bidder of London-based Cable & Wireless after Tata Communications Ltd. last week failed to agree on a price and decided against making an offer.

Newbury, England-based Vodafone is pursuing a European fixed-line acquisition for the first time since 2010, when it ended talks to buy Germany’s Kabel Deutschland Holding AG.

Representatives at Vodafone and Cable & Wireless declined to comment. Vodafone has until midday tomorrow in London to make a firm offer or walk away from the talks. The companies may still fail to reach an agreement, the people said.

Cable & Wireless, which traces its roots to 1866 when the first submarine cable across the Atlantic Ocean was laid, has holdings in more than 60 global cable systems. It also owns the largest U.K. fiber system for businesses, which Vodafone may use to relieve the strain of surging data traffic on its mobile- phone system as Bloomberg stated.

Separated from its parent company in March 2010, Cable & Wireless was once worth 2.4 billion pounds. The stock has lost 65 % of its value in the past two years. In November, the company suspended future dividend payments as sales fell in its traditional voice network.

Gavin Darby, a former Vodafone executive who replaced John Pluthero as Cable & Wireless’s chief executive officer in November, said Feb. 16 that he would rethink network investments in the U.K. and overseas. The company plans to simplify its business and management structure and cut more head office jobs, with “more significant, strategic decisions” due next month.

 

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