Vodafone Gets Same Deadline as Tata for Cable & Wireless Bid
Vodafone, which initially had to announce whether it intended to make an offer by March 12, now has until March 29, the same deadline granted to India’s Tata Communications Ltd. (TCOM), London-based Cable & Wireless said in a statement today.
Cable & Wireless climbed 5.9 percent to 36.2 pence in London trading, giving the company a market value of 994 million pounds ($1.6 billion). Vodafone lost 0.9 percent.
“C&W won’t be willing to open the books unless there’s serious intent shown by Vodafone,” said Nick Brown, an analyst at Espirito Santo in London. “Their share price is at the mercy of Vodafone’s actions at the moment.”
Vodafone is pursuing a European fixed-line acquisition for the first time since 2010, when it ended talks with Kabel Deutschland Holding AG (KD8), Germany’s largest cable-operator. The Newbury, England-based company wants Cable & Wireless’s fiber network to boost its fixed-line system in the U.K. and relieve the strain of surging data traffic.
A Vodafone spokesman declined to comment today.
Cable & Wireless lost 70 percent of its market value in less than two years. The company, which has replaced two chief executive officers since June, has assets ranging from the largest U.K. core fiber network to an overseas enterprise unit. Mumbai-based Tata said this month that it may make a cash offer.
The U.K. is Vodafone’s only major European market in which it lacks a fixed-line network. The operator, which said last month that data revenue climbed 13 percent in the U.K. in the last quarter of 2011 as more customers bought smartphones, is seeking to shift traffic onto fixed lines to reduce the burden on its wireless network.
In November, Cable & Wireless suspended future dividend payments as sales fell in its traditional voice network and it announced that John Pluthero was stepping down as CEO after less than six months at the helm. The operator said Feb. 16 that profitability in its voice business was declining as contracts were renegotiated.
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