14 Feb 2012

Vodafone Confirmed Interest in CWW

After recent speculation about a possible take-over, Vodafone has confirmed that it is in the very early stages of a potential offer for Cable and Wireless Worldwide, CWW.

A Vodafone release stated that there was no certainty that an offer would be made, nor had any terms been set out, but that they would make a further announcement in due course if appropriate.

The Vodafone statement was made after speculation rose over the weekend of 11 / 12 February regarding the possible takeover.

The possible takeover comes are CWW has issued a number of profit warnings after having been split off from Cable & Wireless Communications in March 2010, and the subsequent collapse of the share price. Much of this arose as a result of cuts inn UK government spending which have lead to heavy losses in the six months to September 2011.

CWW employs over 250 staff at a data centre in Leeds UK, where it sells telecoms and internet services to major UK businesses. The company provides voice, data and hosting services to a number of organisations including the police and companies including UK brands: Next, Tesco and United Utilities. CWW also has an international cable network connecting more than 150 countries.

However, Vodafone is thought not to be the only company that is interested because it is also thought that private equity firm Apax Partners may also be interested.

At its closing price on Friday 10 February, CWW was worth £530, having lost four fifths of its price since the demerger. It has also been said that any take-over is likely to be delayed until the new CWW chief executive Gavin Darby has been able to settle in and stabilise the business.

It is also thought that the company would be worth far more if it were broken up, rather than being sold as a single listed entity.

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