Posted by Kellie on 23 February 2012
Rumours are rife that UK mobile phone operator Vodafone may wish to expand its operations by taking over Cable & Wireless Worldwide. Vodafone already operates mobile phone networks in several countries; taking over CWW would help it to grow still further. The expansion, however, would be pricey. According to unnamed sources who spoke to the London Sunday Times, the expected price tag for the takeover could surmount £1 billion.
CWW owns the largest fibre network that is primarily dedicated to UK business use. Current shareholders of CWW have indicated that they are not willing to sell their shares of the company at current price levels. This is remarkable considering the fact that takeover rumours have caused the share price to soar in recent weeks. The effect was only magnified when Vodafone went further and confirmed that it was indeed thinking about a takeover bid.
One investor, who declined to be named, remarked: "There's a pretty huge gulf between what an opportunistic bidder would want to pay and what the larger, longer-term shareholders would sell for.”
Vodafone only has a limited amount of time to finalise its offer. UK takeover rules decree that the mobile phone giant must either announce a firm offer soon or abandon the plan completely. The deadline for a decision is in early March.