Analysts have poured cold water over a this week’s rumours about a takeover effort by SingTel for UK enterprise telco Cable & Wireless Worldwide. SingTel, they say, has a strict Asia-Pacific focus.
Following a meeting with SingTel, Citigroup told clients…
Analysts have poured cold water over a this week’s rumours about a takeover effort by SingTel for UK enterprise telco Cable & Wireless Worldwide. SingTel, they say, has a strict Asia-Pacific focus.
Following a meeting with SingTel, Citigroup told clients in a note that the Singapore group “had clarified its preference to focus on acquisitions in the Asia Pacific region where it can build scale and drive revenue growth via penetration.
“This to us indicates that there is likely to be limited interest on the part of SingTel in acquiring C&W Worldwide, contrary to UK press reports”.
Steve Malcolm, director of equity research at Evolution securities, echoed Citigroup’s note, saying “it would mark a dramatic change in its stated strategy of investment in adjacent business in Asia and emerging markets. It would bring no real synergies or tax benefits”.
Another analyst told TelecomFinance that although bid speculation for CWW has been rife since it was spun off from parent group C&W in March, he did not think the rumours were the result of board members pumping up its share price to capitalise on an exit.
US operators AT&T and Verizon have both been linked to CWW recently. According to the analyst, who did not want to be named, the two US firms feel their domestic markets are now settled. They are tentatively looking outside the US and the only assets they are interested in are global corporates like CW&W, he said.
Bankers have long said that the logical buyer for the unit would be these American operators, who they warn, however, have a penchant for window shopping.
A SingTel spokesperson declined to comment on market speculation.
