UK-based telecom company Cable & Wireless Worldwide Plc or CWW (CW.L) announced Monday that its shareholders voted by the requisite majority to approve the recommended acquisition offer from telecom giant Vodafone Group Plc (VOD,VOD.L).
CWW's largest shareholder with a 19 percent stake, Orbis Investment Management, also dropped its opposition to the deal. Orbis was threatening to block the deal in the hope of securing a higher price.
A statement attributed to Orbis read, "Based on the information announced by CWW today which was shared with us on Saturday and following discussions with CWW, we now believe that the CWW Scheme of Arrangement will eventually succeed, even if Orbis were to vote against it today."
"In these circumstances, our opposition would only serve to prolong the process because the Company would likely adjourn today's meetings to secure the necessary votes. This is not in the interests of any CWW stakeholder. Accordingly, Orbis intends to vote in favour of the Scheme at the meetings today," Orbis statement added.
The deal required approval from 75 percent of the CWW shares that voted. Including proxy votes received on Friday, the deal was approved nearly unanimously by 99.15 percent shares voting in support, with the holders representing nearly 78.7 percent of all CWW shares voting.
The completion of the deal, which is now subject to regulatory approval and court sanctioning, is expected very soon, with CWW saying that it expects the last day for dealings in CWW Shares will be July 25, 2012.
The approved deal will see CWW shareholders receiving 38 pence in cash for each scheme share held by them. Vodafone agreed to buy CWW on April 23 in an all-cash deal valued at about 1.04 billion pounds or $1.68 billion.
The offer represented a 92 percent premium to the closing price of 19.8 pence per CWW share on February 10, which was the last business day before the commencement of the offer period. However, the offer is 2 percent less than CWW's average price over the past 12 months. Vodafone is funding the deal from its own resources.
Vodafone, which first made an official approach for CWW in early February, emerged as the sole bidder after India-based telecommunications company Tata Communications Ltd. (TCL) abandoned its takeover efforts in mid-April, stating it was unable to reach an agreement with CWW on an offer price.
CWW 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.
CWW has been going through a tough time since its spinoff from parent Cable & Wireless in March 2010, making a series of profit warnings and suffering numerous management changes. The company's market value has declined more than 70 percent over the last two years, making it an attractive acquisition target.
CW.L shares closed Monday's trading session on the LSE at 37.77 pence, up 2.74 pence or 7.82% on a volume of 199.71 million shares. VOD.L closed at 174.90 pence, up 1.20 pence or 0.68% on a volume of 68.85 million shares.
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