Gentlemen, we are now in a state of necessity, and necessity knows no law - Reich Chancellor Bethmann-Hollweg
MOBILE OPERATOR Vodafone has reached an agreement with Cable & Wireless to buy the business.
We reported in February that Vodafone was likely to buy Cable & Wireless and had mentioned a figure of £700m. Today Vodafone said it has made an "agreed bid" with Cable & Wireless that is worth £1bn.
"Vodafone and Cable & Wireless Worldwide plc are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Vodafone will acquire the entire issued and to be issued ordinary share capital of CWW," Vodafone said in a short note.
Having lost Tata as a suitor, Cable & Wireless extended its deadlines in order to give Vodafone more time to make an offer. Predictably, the senior people at both companies are happy with the news.
"The offer from Vodafone announced today will enable shareholders to crystallise 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," said John Barton, chairman of Cable & Wireless.
"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."
This sentiment was mirrored at Vodafone, where again an executive said that it will be good for money men and customers.
"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," soothed Vittorio Colao, CEO of Vodafone Group,
"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."
Cable & Wireless' recent history certainly shows a firm that is open to change. It has managed to decrease sales, reduce dividends and go through a number of executives in the last year and a half, including at least two CEOs and a CFO.
One of the most recent changes, the hiring of Gavin Darby as CEO, saw it take on a man direct from Vodafone. "Gavin will provide the longevity of leadership, energy and fresh insight needed by Cable & Wireless Worldwide for the future," was Barton's line at the time. µ