Vodafone Europe B.V. has agreed to acquire Cable & Wireless Worldwide plc (CWW) for approximately £1.044 billion ($1.7 billion) in cash.
The offer of 38 pence each CWW share held represents a premium of approximately 92 percent to the closing price of 19.8 pence per CWW share on February 10, 2012 (the last business day prior to the commencement of the offer period) and 107 percent to the average closing price of 18.4 pence per CWW share for the three months ended the same day.
Vodafone reserves the right to increase the offer if a third party announces a possible offer or offer for CWW. The company says the acquisition will strengthen its enterprise business and other cost saving opportunities.
The CWW directors have agreed to recommend unanimously that CWW shareholders approve the offer. Vodafone says it already has received “irrevocable undertakings” from RBC Global Asset Management Inc., Sky Investment Counsel Inc., and Cyrte Investments GP I B.V. to vote in favor of the deal. Combined, these investors hold approximately 10.35 percent of CWW’s ordinary shares as of last Friday, April 20.
Meanwhile, Vodafone says it also has obtained letters of intent from J.P. Morgan Asset Management Ltd. and Investec Asset Management Ltd. to vote in favor of the acquisition. These two firms hold approximately 8.13 percent of CWW’s ordinary shares.
Said John Barton, CWW chairman of CWW, “Under the leadership of Gavin Darby, Cable & Wireless Worldwide has outlined a strategy to refocus the business on achieving sustainable cash generation and returns from capital invested. However, the offer from Vodafone announced today will enable shareholders to crystallize a value, in cash, that represents a significant premium to recent trading levels and avoid exposure to the risks inevitably presented by executing a medium-term improvement strategy.
“Furthermore, the combination with Vodafone represents an exciting opportunity for Cable & Wireless Worldwide’s customers, employees, partners, and other stakeholders to benefit from the many advantages that will come from being part of the Vodafone Group,” Barton concluded.
Added Vittorio Colao, CEO of Vodafone Group, “We are pleased to reach agreement with the Board of Cable & Wireless Worldwide, who unanimously recommend our offer. The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations. We look forward to working with the management and employees of Cable & Wireless Worldwide to combine our expertise for the benefit of our customers and shareholders.”
UBS is acting as sole financial adviser to Vodafone and Vodafone Group. Barclays and Rothschild are acting as joint financial advisers to CWW.