Vodafone CWW bid backed by investor body

VODAFONE’s bid for Cable & Wireless Worldwide was bolstered yesterday when the deal was recommended by Institutional Shareholder Services (ISS), which represents about 10 per cent of CWW’s shareholders.

But the news, published after markets closed, did not come in time to stop the telco giant’s shares from dropping 2.7 per cent to 169p yesterday.

Traders were reacting to two consecutive days of Vodafone announcements. The mobile network operator yesterday revealed it has increased its shareholding in Invitation Digital Limited (IDL) to a majority stake, just one day after admitting it is in talks to acquire Telstra’s New Zealand subsidiary.

Vodafone bought 21 per cent of IDL, the parent company of mobile coupon provider Vouchercloud, last May and has now upped its stake to 57 per cent.

Financial details were not disclosed, but it is understood the deal values IDL at around £20m.

Vodafone also declined to discuss the financials of its talks with Telstra, but analysts estimated the deal could be between A$300-A$400m (£192m-£256m).

However, Vodafone has been very clear that its £1bn offer for CWW will not be increased. CWW’s biggest shareholder Orbis has suggested it could vote against the deal, but the ISS’s support will take some of the pressure off the bidding telco.