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| Version 1 | Version 2 |
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| Cable & Wireless Worldwide shareholder now backs Vodafone bid | Cable & Wireless Worldwide shareholder now backs Vodafone bid |
| (about 6 hours later) | |
| Mobile phone giant Vodafone has claimed victory in its £1bn bid for Cable & Wireless Worldwide following the capitulation of CWW's largest shareholder. | |
| Vodafone's ambitions of creating the second largest telecoms group in the UK after BT had been cast into doubt by Orbis Investment Management, which holds a 19% stake in CWW and had threatened to block the deal in the hope of securing a higher price. | |
| The offer required approval from 75% of votes cast, meaning a low turnout or a few more objectors could have tipped the scales in favour of Orbis. However, proxy votes received on Friday from those who could not attend the emergency meeting had been overwhelmingly in favour, with nearly 99% in support, and the votes represented nearly 60% of all CWW shares. | |
| "Based on the information announced by CWW today which was shared with us on Saturday and following discussions with CWW, we now believe that the CWW Scheme of Arrangement will eventually succeed, even if Orbis were to vote against it today," the investment fund stated. "In these circumstances our opposition would only serve to prolong the process because the company would likely adjourn today's meetings to secure the necessary votes. This is not in the interests of any CWW stakeholder. Accordingly, Orbis intends to vote in favour of the scheme at the meetings today." | "Based on the information announced by CWW today which was shared with us on Saturday and following discussions with CWW, we now believe that the CWW Scheme of Arrangement will eventually succeed, even if Orbis were to vote against it today," the investment fund stated. "In these circumstances our opposition would only serve to prolong the process because the company would likely adjourn today's meetings to secure the necessary votes. This is not in the interests of any CWW stakeholder. Accordingly, Orbis intends to vote in favour of the scheme at the meetings today." |
| Vodafone is paying 38p a share, 2% less than the company's average price over the past 12 months, and Orbis had complained the deal did not "reflect the value" of CWW. However, the cable network has suffered a share price collapse following a series of profit warnings. Its previous management under chairman John Pluthero struggled to digest a series of acquisitions and compete for corporate clients with BT. | |
| This was despite securing one of the largest incentive deals on record for a listed company, which saw top executives from CWW and its sister company Cable & Wireless Communications collect £88m in payouts. CWC, which operates telecoms companies in the Caribbean and Panama, was spun out and listed as a separate company in March 2010, and will remain independent following the Vodafone deal. | |
| The only alternative to Vodafone's offer open to investors was to back new chief executive Gavin Darby's recovery plan. But Darby, who worked at Vodafone before joining CWW, was regarded by many investors as having been hired to sell the company rather than turn it around, and the company's own board recommend the Vodafone bid as providing more certainty amid tough market conditions. | |
| Vodafone's interest sparked Tata Communications to make an offer, but the Indian group withdrew after failing to reach agreement with CWW's board on an offer price, leaving Vodafone as sole bidder. | |
| The acquisition will transform Vodafone's UK arm into the second largest domestic telecoms business after BT, with revenues of just under £7bn. It brings to an end the story of one of Britain's oldest telecoms businesses. | The acquisition will transform Vodafone's UK arm into the second largest domestic telecoms business after BT, with revenues of just under £7bn. It brings to an end the story of one of Britain's oldest telecoms businesses. |
| CWW traces its beginnings to a series of telegraph companies founded in the 1860s, and grew up to become the empire's communications network. | |
| The merger will allow Vodafone to overtake rival mobile networks Everything Everywhere and O2 in income in the UK, and to take on BT and Virgin Media in offering telecoms and data hosting solutions to the business sector. | The merger will allow Vodafone to overtake rival mobile networks Everything Everywhere and O2 in income in the UK, and to take on BT and Virgin Media in offering telecoms and data hosting solutions to the business sector. |
| CWW's fibre-optic cables, one of the largest British owned networks with 20,500km of lines, will also give Vodafone the capacity to carry more mobile internet traffic at a lower cost. It currently rents a large amount of capacity from BT. | CWW's fibre-optic cables, one of the largest British owned networks with 20,500km of lines, will also give Vodafone the capacity to carry more mobile internet traffic at a lower cost. It currently rents a large amount of capacity from BT. |