Vodafone has this morning announced that they have reached agreement on the terms of a recommended cash offer to acquire the entire issued and to be issued ordinary share capital of Cable & Wireless Worldwide (CWW).
Under the terms of the Offer, CWW Shareholders will be entitled to receive 38 pence in cash for each CWW Share held, representing a premium of approximately 92 per cent to the Closing Price of 19.8 pence per CWW Share on 10 February 2012, that being the last Business Day prior to the commencement of the Offer Period.
The announcement says the acquisition of CWW will strengthen the enterprise business of Vodafone Group in the UK and internationally and presents attractive network and other cost saving opportunities for Vodafone Group.
Commenting on the Offer, John Barton, Chairman of CWW, said: “Under the leadership of Gavin Darby, Cable & Wireless Worldwide has outlined a strategy to refocus the business on achieving sustainable cash generation and returns from capital invested.
However, the offer from Vodafone announced today will enable shareholders to crystallise 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.
Furthermore, the combination with Vodafone represents an exciting opportunity for Cable & Wireless Worldwide’s customers, employees, partners and other stakeholders to benefit from the many advantages that will come from being part of the Vodafone Group.”
Vittorio Colao, CEO of Vodafone Group, said, “We are pleased to reach agreement with the Board of Cable & Wireless Worldwide, who unanimously recommend our offer. The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations. We look forward to working with the management and employees of Cable & Wireless Worldwide to combine our expertise for the benefit of our customers and shareholders.”
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 and will provide mobile giant Vodafone with a UK fixed line network.
Many will see the move as finally closing a chapter on CWW which has seen the company issue several profit warnings, suspended dividends and get through three CEO’s since de-merger.
Last week, hopes of a bidding war between Vodafone and India form Tata faded as the Tata withdrew their interest. CWW shares fell 20% on the news.