The board of Cable & Wireless Worldwide (CWW) has reaffirmed its support for a £1.04bn (US$1.67bn) takeover by UK telco to mobile operator Vodafone, after reporting a steep fall in earnings.
CWW said Vodafone’s 38p per share offer was more …
The board of Cable & Wireless Worldwide (CWW) has reaffirmed its support for a £1.04bn (US$1.67bn) takeover by UK telco to mobile operator Vodafone, after reporting a steep fall in earnings.
CWW said Vodafone’s 38p per share offer was more attractive than attempting to revive the business during tough economic conditions.
“The board had to weigh up the transformative nature of the long term plan and potential upside it could deliver against the risks associated with the plan and the timescale required,” stated CWW on 21 May.
“Given this the board believes the Vodafone offer represents an excellent opportunity for shareholders to realise an attractive valuation in cash today.”
The comments came as the enterprise-facing telco posted a 14% decrease in earnings to £378m (US$598m) for the year to the end of March.
Coinciding with CWW’s results, Vodafone published a scheme of arrangement for its planned acquisition, ahead of a shareholder meeting on 18 June.
As part of its offer, Vodafone also said it is making an offer to all convertible bondholders to purchase their debt for cash.
But the mobile operator requires at least 75% of shareholder approval for the takeover. It has already received the support of 18.6% of CWW’s shareholders, however, Orbis, the largest shareholder with a stake of around 20%, has criticised the offer, saying it does not reflect the true value of the company.
