Cable & Wireless Agrees To Vodafone Offer

Cable & Wireless Worldwide PLC (CW.LN) said Monday that it has agreed to a GBP1.04 billion takeover bid from mobile communications giant Vodafone Group PLC (VOD.LN).

The cash offer of 38 pence a share comes a few days after India's Tata Communications Ltd. (TCL) withdrew its interest in Cable & Wireless.

"The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the U.K. communications market and brings attractive cost savings to our U.K. and international operations," Vittorio Colao, chief executive of Vodafone, said in a press statement Monday.

For Vodafone, the acquisition would support margins and improve network quality in the U.K. It would also support the global enterprise business, in which Vodafone is currently investing, according to recent research from brokerage firm Sanford C. Bernstein.

Vodafone had until 1100 GMT on Monday to make a bid for C&W Worldwide or walk away after the U.K. Takeover Panel on Thursday extended the deadline for a third time.

Tata Communications said after the close of trade Wednesday that it wouldn't make an offer for C&W Worldwide after failing to agree on a price with the U.K.-based company. The disappointing news pushed C&W World's shares down as much as 24% during Thursday's trade on the London bourse, following widespread press reports suggesting Tata Communications had raised finance for the bid.

On Feb. 13, Vodafone said it was in the very early stages of evaluating a takeover bid for C&W Worldwide--which counts U.K.-based telecommunications operator BT Group PLC (BT.A.LN) as one of its biggest rivals--following press speculation. A few weeks later, Tata Communications said it too was mulling a bid for the company.

C&W Worldwide owns the U.K's biggest fiber network dedicated to businesses. It also has an international cable network that reaches across Europe, India and throughout Asia. But it has had a tough time since its spinoff from parent Cable & Wireless PLC in 2010, suffering a sliding stock price and several management changes.

-By Jessica Hodgson and Lilly Vitorovich, Dow Jones Newswires; + 44 207 842 9373; [e-mail]