Vodafone has had a £1.044 billion offer to acquire Cable & Wireless Worldwide (CWW) accepted and recommended by the UK-based telco’s board. The two companies have reached an agreement on a cash offer which will see Vodafone acquire the entire issued and soon-to-be-issued ordinary share capital of CWW.
According to Vodafone, the acquisition of CWW will strengthen its enterprise division in the UK and internationally and “presents attractive network and other cost saving opportunities.” CWW has a UK fixed-line network and client list that includes 70 FTSE100 businesses.
The CWW directors consider the Vodafone offer terms to be fair and reasonable and have unanimously recommended that CWW shareholders should vote in favour of the offer.
As the offer stands, CWW shareholders will receive £0.38 per share, a premium of 92 percent over the £0.20 closing price on 10 February, the day before CWW put itself up for sale. Vodafone can up its offer if a third party announces a competing offer.
Several CWW shareholders, representing 10.35 percent of the ordinary share capital of the company, have already voted in favour of the offer. In addition, Vodafone has received letters of intent from J.P. Morgan Asset Management and Investec Asset Management indicating that they will vote in favour of the deal, representing a further 8.13 percent of ordinary share capital.
Vodafone CEO Vittorio Colao said the acquisition will create “a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations.”
CWW chairman John Barton said the acquisition is an exciting opportunity for CWW’s customers, employees and partners, “to benefit from the many advantages that will come from being part of the Vodafone Group.”
Vodafone’s interest in CWW was first reported in February, with India's Tata Communications following in March. However, Tata withdrew its interest last week as it was reportedly unable to agree a price. Following Tata’s withdrawal, Vodafone was given until today to make a bid.
CWW was spun off from Cable & Wireless Group in March 2010 and has since issued three profit warnings.