Vodafone to boost bandwidth with Cable and Wireless buy?

14/02/2012

Vodafone has confirmed it is in the early stages of evaluating the merits of a potential offer for Cable & Wireless Worldwide. Vodafone is the world’s largest mobile operator by revenue, and the purchase of Cable and Wireless’ fixed-line network could boost bandwidth for its Internet-hungry customers.

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“Vodafone regularly reviews opportunities in the sector and confirms that it is in the very early stages of evaluating the merits of a potential offer for CWW,” the company said on Monday.

The announcement follows speculation in the media over a possible bid. Vodafone says there is no certainty that an offer will be made but that any approach would be in cash.

C&W Worldwide, which has issued a string of profit warnings since its demerger from Cable & Wireless Communications in March, 2010, has fixed lines that are used by mobile operators to provide links to mobile transmitters and switching offices – a process known as wholesale backhaul.

It also provides voice, data and hosting services to companies like Next, Tesco and United Utilities, and retains an international cable network connecting more than 150 countries.

It declined to comment on Vodafone’s statement, which came after the Sunday Times reported it was considering a £700m bid for the group.

C&W Worldwide’s shares, which have lost three-quarters of their value in the last 18 months, surged 30 per cent to a three-month high of 25.5 pence on Monday, valuing the company at £700-million, while Vodafone rose 0.9 per cent to £1.74.

Vodafone has until March 13 to either announce a firm intention to make an offer or say that it does not intend to make an offer.

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