Responding to press speculation, Vodafone Group Plc (VOD: Quote,VOD.L) on Monday confirmed that it is in very early stages of evaluating the merits of a potential offer for telecoms company Cable & Wireless Worldwide Plc (CW.L).
The Sunday Times of London had reported, without naming any sources, that the British mobile phone company is mulling a 700 million pounds ($1.1 billion) bid for the troubled telecoms company, which once rivaled biggies like BT.
In its statement, Vodafone added that it regularly reviews opportunities in the sector, and that there is no certainty that an offer will be made nor as to the terms on which any offer might be made.
"Any offer, if made, will be in cash but Vodafone reserves the right to change the specie of consideration. A further announcement will be made in due course, if appropriate," the company said.
As per the Times report, Apax Partners LLP, which has a specific telecoms investment unit, may also prepare a bid.
Bracknell, UK-based Cable & Wireless Worldwide specializes in providing communication networks and services, including managed Voice, Data and IP based services and applications to large corporates, governments, carrier customers and resellers.
The company was formed when Cable & Wireless plc demerged in March 2010 to form two companies, the other being Cable & Wireless Communications plc. Since then, its market value has collapsed, attracting a number of suitors.
Analysts reportedly have suggested that Cable & Wireless would be worth far more if it was split and sold off than as a single entity.
The reports noted that any deal would be pending until Cable & Wireless' recently appointed Chief Executive Officer Gavin Darby - a former Vodafone executive - stabilizes the troubled business. It is expected that Darby will provide details of his turnaround plan when he releases a trading statement on Thursday.
C&W has been struggling for a rebound. Recently, in November, the company reported a loss for the first-half hurt by goodwill write down and tax charges and lower revenues, and said it intends to suspend future dividend payments.
Vodafone shares closed Friday's trading at 172.65 pence, down 1.85 pence or 1.06 percent.
Cable & Wireless shares closed Friday's trading at 19.75 pence, down 0.57 pence or 2.81 percent in London.
by RTT Staff Writer
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