UK mobile operator Vodafone has had its ‘put up or shut up’ deadline to bid for local fibre operator Cable & Wireless Worldwide (CWW) extended to coincide with rival suitor Tata Communications’ timetable.
Vodafone’s deadline was today pushed…
UK mobile operator Vodafone has had its ‘put up or shut up’ deadline to bid for local fibre operator Cable & Wireless Worldwide (CWW) extended to coincide with rival suitor Tata Communications’ timetable.
Vodafone’s deadline was today pushed back from 12 to 29 March, in line with India-based Tata.
Under the UK’s takeover regulations, both companies will have to declare by that date whether or not they intend to make a cash offer for the telco.
Announcing the deadline extension, CWW reaffirmed: “There can be no certainty that any offer will be made, nor as to the terms of any offer.”
Despite this, the announcement sent CWW’s shares soaring as TelecomFinance was going to press, as investors hoped a bidding war could break out.
Conflicting reports earlier this week had ranged from Vodafone putting the finishing touches on a bid to the operator being set to walk away over network quality concerns.
Meanwhile, reports suggested Tata was more committed to a potential deal, as it reportedly seeks US$2bn to both fund its offer and refinance existing debt.
Vodafone and Tata are being advised by UBS and Standard Chartered, respectively. CWW, which has a market value of around £900m (US$1.43bn), has mandated Barclays Capital and Rothschild. Reports suggest the target’s shareholders are calling for at least £1bn (US$1.59bn) from any potential buyer. Neither party was able to comment on the speculation.
Some industry spectators have also pointed to another possible alternative to an auction, where Vodafone and Tata carve up CWW between them. Such a scenario could see Tata taking CWW’s international subsea cable business, with Vodafone targeting its UK assets.
However, Ovum analyst David Molony cast doubt on any arrangement to split CWW between the two.
“Vodafone is interested in the global piece of CWW, the same piece that Tata is interested in,” said Molony.
He reasoned that Vodafone’s international enterprise business needs a high performance network across the Middle East and Asia just as much as Tata does, and “it’s been the lack of fixed network infrastructure that has held Vodafone Global Enterprise (VGE) back from doing the immense deals with multinational corporations”.
Despite this, Molony said it was conceivable that Tata could carry out the main deal to acquire CWW, with Vodafone taking part as a separate carrier transaction to put VGE customers across the expanded network. He suggested such an arrangement could even extend to a fixed/mobile/unified communications services cooperation agreement between Vodafone and Tata, but it would still rub up against Vodafone’s fixed/mobile convergence developments with US telco Verizon.
