TATA Communications has ditched discussions to bid for Cable & Wireless Worldwide (CWW), surprising the City after weeks of building up financing from a handful of banks.
The Indian company announced after markets closed yesterday that it “has been unable to reach agreement with CWW on an offer price and therefore confirms that it does not intend to make an offer” for the cable business.
CWW confirmed that discussions are ongoing with Vodafone, which has until 5pm today to make an official bid under the “put up or shut up” Takeover Code rule.
Tata announced on 1 March it was considering a bid for CWW, two weeks after Vodafone confirmed it was eyeing the struggling cable company.
The Mumbai-based business, whose parent company Tata Group is the largest foreign investor in the UK and includes Tetley Tea and Jaguar Land Rover in its portfolio, is thought to have secured $2bn of financing to fund an acquisition of CWW, leading analysts to expect an offer of up to 45p per share.
But CWW, whose share price has almost doubled from 20p to 37p since speculation of a takeover bid kicked off in mid-February, was seemingly unwilling to accept the price range Tata was able to offer.