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Tata Comm evaluates cash offer for C&W in rival bid to Vodafone

BS Reporter  |  Mumbai 

Tata Communications Ltd (TCL) said it might make a cash offer for Cable & Wireless (C&W), setting up a potential rivalry with Vodafone Group Plc to win control of the owner of Britain’s largest business fibre network. Talks are “at a very preliminary stage” and TCL must decide whether it would make an offer by March 29, the company said on Thursday. Vodafone, which said last month it was evaluating a bid, has until March 12 to announce whether it will make a formal offer for London-based C&W. Simon Gordon, a Vodafone spokesman, declined to comment on Thursday.

TCL made a statement to the stock exchanges, confirming its interest in the MNC, headquartered in Berkshire’s Bracknell and valued at around $1.2 billion (Rs 5,880 crore). The 1860-founded C&W has operations across various countries and provides both voice and data services.

The announcement by Tata, made in accordance with the UK City Code on Takeovers and Mergers, shot up the stock prices of both companies. The code requires TCL to make a public disclosure of its intentions under certain circumstances. TCL’s stock went up 5.6 per cent in intra-day trade. It finally closed at Rs 235.6 per share, 1.2 per cent higher than the previous close. The stock of LSE-listed C&W too surged 25 per cent in early trade. TCL officials could not be reached on queries like the possible funding arrangements of such a big acquisition. TCL is a loss-making entity, and has a debt of $1.6 billion (Rs 7,840 crore).

 

First Published: Fri, March 02 2012. 00:04 IST
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