With a stock market value of just 1bn pounds ($1.59bn) and 2.4bn pounds ($3.8bn) of net cash, C&W is an obvious takeover candidate. The revelation that 1.5bn pounds ($2.4bn) of cash is ring-fenced to cover any tax liability that Deutsche Telecom AG may face after the German incumbent’s 1999 acquisition of its 50% stake in wireless operator One2One from C&W, has made the company even more attractive by depressing its share price.
Independent UK carrier Thus Plc refused to comment on reports that it could be a likely buyer with the support of international banking groups.
C&W is spending 800m pounds ($1.3bn) on pruning its global unit that was built up with the $340m purchase of Digital Island Inc in 2001, and the acquisition earlier this year of the assets of bankrupt Exodus Communications Inc for $850m. The cut-backs will costs the jobs of 3,500 of its 12,500-strong global workforce, and will involve it giving up unprofitable business worth about 300m pounds ($477m) annually.
Those plotting a takeover of the company have an even more radical agenda of junking the global operation entirely, possibly handing its over to Nippon Telegraph and Telephone Corp which may welcome the extra business as a way of making its US wholesale internet subsidiary Verio Inc profitable.
Source: Computerwire
