LONDON – Telecoms operator Vodafone on Monday launched an agreed takeover bid for Cable & Wireless Worldwide PLC which values the company at 1 billion pounds ($1.6 billion).
Vodafone Europe said it is offering 38 pence per share, a 92 per cent premium over the closing price on Feb. 10, the day before Vodafone signalled its interest.
The board of Cable & Wireless Worldwide, which supplies cable network services, is backing the offer as “fair and reasonable.”
Vodafone shares were down 0.6 per cent at 170.5 pence in early trading. Cable & Wireless Worldwide shares were up 16 per cent at 37.2 pence.
“The offer from Vodafone announced today will enable shareholders to crystallize a value, in cash, that represents a significant premium to recent trading levels and avoid exposure to the risks inevitably presented by executing a medium-term improvement strategy,” said John Barton, CWW’s chairman.
Last year, CWW reported a net profit of 211 million pounds on revenue of 2.26 billion pounds.
Revenue from traditional voice communication has been declining, and CWW has been working to build up its data business.
Vittorio Colao, CEO of Vodafone Group, said the takeover offered cost savings in his company’s U.K. and international operations.
CWW, created in 2010 following a demerger, operates a cable network serving 150 countries directly or through local partners, supplying telecoms services to businesses and public sector bodies.
Vodafone’s offer came after Tata Communications dropped out last week as a potential bidder. Now that Vodafone has bid, Tata could come back with an offer.