Vodafone’s ‘put up or shut up’ deadline for fibre operator Cable & Wireless Worldwide (CWW) has been extended to 23 April, after the target’s only other suitor dropped out of the running.
The deadline extension was granted on 19 April, a day…
Vodafone’s ‘put up or shut up’ deadline for fibre operator Cable & Wireless Worldwide (CWW) has been extended to 23 April, after the target’s only other suitor dropped out of the running.
The deadline extension was granted on 19 April, a day after Indian telco Tata Communications announced it had been unable to reach an agreement on an offer price. Reports had suggested Tata was close to finalising a US$2bn loan to help fund an acquisition of CWW, which has a market cap of around £1bn (US$1.6bn).
CWW’s stock took a near 20% hit in early trading hours the day after Tata’s announcement, as investor hopes of a bidding war were dashed. As TelecomFinance was going to press, the shares had recovered slightly to around 34 pence, which was still down from the 37.05 pence per share closing price on 18 April.
Analysts had previously cautioned that although a bidding war could ensue between Tata and Vodafone, the latter would be able to justify a higher premium for the group.
Announcing the deadline extension, CWW confirmed “that advanced discussions with Vodafone are on-going with a view to establishing whether or not they might result in a formal offer for the company which the Board of Cable&Wireless Worldwide would be willing to recommend”.
On 13 February, Vodafone, which is being advised by UBS, became the first party to confirm its interest in acquiring CWW, following reports that it was looking at submitting a £700m (US$1.09bn) cash offer. Tata announced its interest on 1 March. Both companies were originally given until 19 April to declare whether they planned to place takeover bids after their original deadlines were extended on CWW’s request.
Despite Tata’s announcement, UK takeover rules mean Tata could re-enter the race to acquire CWW if Vodafone later makes a firm offer.
CWW has mandated Barclays Capital and Rothschild to advise it on the potential deal.
Tata was being advised by Standard Chartered, which was reportedly also the lead arranger for its search for a US$2bn loan to partly fund a CWW bid. One newswire had claimed that Standard Chartered had already underwritten some of the financing, while ANZ, DBS Bank and the State Bank of India were set to give underwritten commitments. HSBC, ING and RBS were reportedly interested in joining the group of underwriters.
