CABLE and Wireless Worldwide’s stock jumped nine per cent yesterday on rumours that Tata Communications is on the cusp of making a formal offer for the ailing telecoms group.
Reports claimed the Indian company, which earlier this month was said to be looking for $2bn (£1.26bn) in funding to loan the acquisition and refinance existing debt, would bid imminently.
Mumbai-based Tata was thought to have received commitments from banks but not yet signed final documents.
But a source close to the matter denied Tata had settled on a verdict, claiming its decision would be taken nearer the deadline.
Tata announced its interest in CWW on 1 March, two weeks after global telecoms giant Vodafone signalled it was evaluating the merits of an offer.
Both companies have until 29 March to “put up or shut up” under Takeover Panel rules.
CWW’s share price has almost doubled since news of a potential bid emerged in mid-February, growing the company’s valuation from just under £530m to over £1bn.
Despite a disastrous year that took the cable company through three chief executives and a string of profit warnings, CWW appeals to suitors because of its fixed phone lines, which would alleviate an over-subscribed mobile network, and its roster of government and large corporate clients.
Tata Communications’ parent company Tata Group has a history of buying British firms.
The Tetley Tea owner has spent almost £10bn on UK acquisitions in the last ten years, including the $2.3bn purchase of Jaguar Land Rover in 2008.