Analysts at Espirito Santo said in a note last month that CWW has tax assets worth up to £991m, based on UK capital losses of £5.197bn.
The sum could be enough to offset the entire cost of buying the company, which had a market cap of £754.8m on Friday. Alternatively, the assets could be used to create a decade-long tax holiday for Vodafone.
However, the analysts said the potential dent to Vodafone’s reputation by using CWW’s tax benefits means the real top-end value of the assets is closer to £430m.
“Vodafone may be concerned about reputational damage with consumers following any deal which potentially could be perceived as the company actively trying to lower its UK tax burden (albeit legally),” they said in the note.
Vodafone has been caught up in a string of tax disputes in recent years, including a merger arrangement in India that on Friday prompted a rethink of the country’s international tax laws.
Last year the company was subject to protests by UK Uncut for handing £1.2bn to the British taxman in what campaigners called a “sweetheart” deal.
Vodafone and CWW declined to comment yesterday. Vodafone and Tata have until 29 March to bid.
FAST FACTS | CWW
● Cable & Wireless Worldwide is being circled by Vodafone and Tata Communications
● The firm said it had UK capital losses of £5.2bn last year, and new chief executive Gavin Darby is mid-way through a business review