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Tata Communications drops CWW bid
19 April 2012
Tata Communications fails to agree on price for Cable & Wireless Worldwide, leaving Vodafone in the running
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Indian operator Tata Communications, headed by Vinod Kumar, will not make an offer to acquire UK-based Cable & Wireless Worldwide.
CWW confirmed that it is still in discussions with Vodafone, which has to declare a firm intention to make an offer by today, April 19, though that may be extended only after approval from the UK’s Panel on Takeovers and Mergers. CWW earlier extended the deadline for TCL as well as Vodafone from March 29 to April 19.
The acquisition of CWW could have helped TCL enhance its presence in the voice and data businesses and in its undersea cable network, said the report. Tata told The Economic Times in India: “TCL was evaluating a possible cash offer for CWW. TCL confirms that it has been unable to reach agreement with CWW on an offer price and therefore confirms that it does not intend to make an offer for CWW.”
Earlier reports suggested TCL was likely to bid for CWW in a deal which could raise its turnover to nearly $6 billion, but warned that the Indian government — which owns a 26% stake in TCL — could oppose the acquisition considering the weak performance of certain TCL subsidiaries.
TCL was also said to be planning to raise $2 billion through a term loan to finance the potential bid.
Standard Chartered Bank and Morgan Stanley were advising TCL on the deal.
The withdrawal by TCL leaves Vodafone as the sole bidder for CWW, a mainly enterprise operator that was split off from Caribbean-focused fixed and mobile operator Cable & Wireless Communications in 2010. GTB
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