INVESTORS sitting on the edge of their seat over the Cable & Wireless Worldwide bidding war might have longer to wait as Vodafone and Tata Communications are set to ask for an extension on the “put up or shut up” deadline imposed by the Takeover Panel.
Vodafone’s original cut-off date of 12 March was extended to match the 29 March deadline given to Tata, the second entrant to the race.
But both firms are understood to be frustrated by the lack of information about the company provided by CWW’s senior management, and therefore feel ill-equipped to make a decision by this Thursday.
Tata is showing no sign of backing down, however. The Mumbai-based communications firm, which is said to have raised loans of $2bn to fund the acquisition, has added Morgan Stanley to its roster of banks working on the deal. Australia and New Zealand Bank, and the State Bank of India, are also said to be joining Tata’s usual choice of Standard Chartered.
Bidders’ ears pricked when CWW’s stock crashed by as much as 80 per cent in the six months following the company’s demerger from Cable & Wireless Group in March 2010. Since then the company has issued three profit warnings and churned through three chief executives.
But despite its struggling finances, CWW is a tempting choice for the interested parties.
Vodafone is likely looking at CWW’s fixed-line phone network in the UK – an asset the telecoms giant lacks – while Tata will have its eye on CWW’s 425,000km undersea cable system.
Both companies will be attracted to CWW’s hefty client list of 70 of the FTSE 100 companies.
It is not only buyers who have been drawn to CWW, however. US activist hedge fund Eliott Management has collected a 0.62 per cent stake so far in the cable company and is understood to be vying to influence the outcome of the bidding war.
Early reports put a £700m price on CWW, when the group had a market cap of under £530m. But the communications network’s stock has almost doubled since Vodafone said it was looking to bid, valuing the company – and any likely bids – above £1bn.