Suitors lining up for CWW
THE GUN could soon fire on a bidding war over Cable & Wireless Worldwide (CWW) if the struggling telecoms company shows signs in its earning report this Thursday of corking its declining value.
Telecoms giant Vodafone and private equity firm Apax Partners are thought to be heading the line of suitors, though O2 is also rumoured to be interested.
Based on Friday’s closing share price of 20p, CWW is worth just under £530m. Analysts have said a successful bidder might have to go above £700m.
However, sources close to the companies have said that there are no imminent plans for this deal.
The speculation comes ahead of CWW’s interim management statement this Thursday – the company’s first earnings report under new chief executive Gavin Darby, who took the helm in November.
Former head Jim Marsh released three profit warnings before handing the rudder to John Pluthero last June, who lasted four months as chief executive and took the cable company to a £433m half-year loss.
Formed from a merger of small British telegraph companies dating back to the 1860s, CWW has repeatedly provoked shareholder concern over the company’s executive remuneration policy.
But this deal could be tempting to Vodafone as CWW specialises in providing communication networks to large corporate and government bodies across the globe.
The move would cement Vodafone’s place as a leading corporate telecoms provider, while increasing the company’s capacity.
Spokespeople for CWW and Apax Partners declined to comment. An O2 representative could not be reached.