C&W Worldwide Shares Rise as Much as 13 Percent on AT&T Bid Speculation
Cable & Wireless Worldwide Plc had its biggest gain in more than five months in London trading on speculation that AT&T Inc. or another company may bid for the company.
“The rumor is driving the share price,” said Tom Gidley- Kitchin, an analyst with Charles Stanley Group Plc in London. Cable & Wireless Worldwide has a large international communication network which AT&T or other companies looking to expand internationally and boost capacity could “potentially find helpful,” he said.
Cable & Wireless Worldwide rose 7.7 percent, the biggest gain since March 26, to close at 71.95 pence as of 4:30 p.m., valuing the company at 1.89 billion pounds ($2.92 billion). AT&T spokesman Niall Hickey said via phone that the company doesn’t comment on market speculation. Cable & Wireless’s spokespeople didn’t return calls seeking comment.
AT&T Inc., the largest U.S. phone company, has considered international investments, particularly in emerging markets, though it hasn’t found an appealing one yet, Chief Financial Officer Richard Lindner said July 22. Cable & Wireless Worldwide, which provides telecommunications services to customers including National Grid Plc, separated from its parent company in March.
“There is some strategic rationale to a bid from AT&T,” said Nick Brown, an Execution Noble analyst in London. “AT&T has a lot of transatlantic traffic for which it needs a bridgehead in Europe, rather than leasing lines and network infrastructure.”
IPhone Demand
Cable & Wireless Worldwide on July 20 said full-year profit will be “around the lower end” of analysts’ estimates following U.K. government spending cuts, prompting the stock to drop 17 percent that day. AT&T on July 22 reported second- quarter profit that beat analysts’ estimates as customers snapped up wireless devices such as Apple Inc.’s iPhone.
“If there is indeed a deal in preparation, it means that AT&T is interested to expand somewhat into the international arena,” said Karim Bertoni, who helps manage $18.5 billion at Banque Syz & Co. in Geneva. “It reminds me a bit of the period at the end of the 90s when operators were merging to create bigger champions with a global reach.”
To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net
Rate this Page