Bid looms as turmoil continues at C&W

Cable conflict: Acrimonious row over who runs telecoms group unresolved as threat grows of US takeover


Industrial Correspondent

Cable & Wireless was last night bracing itself for an opportunistic takeover bid from Craig McCaw, the US mobile phone billionaire, as another day of boardroom turmoil failed to resolve the clash between the chairman, Lord Young of Graffham, and chief executive, James Ross.

Sources close to the company said last night that two board meetings had failed to end the stalemate over who runs the company. Win Bischoff, the deputy chairman, met executives yesterday morning, followed by an afternoon meeting of non-executives where both Lord Young and Mr Ross were questioned closely.

A statement from C&W is expected this morning.

It is understood that Mr McCaw is currently holding discussions with his bankers and has the financial muscle to mount an pounds 11.5bn hostile bid. C&W's shares closed up 3p to 420p, valuing the company at more than pounds 9bn.

C&W was plunged into chaos at the weekend after it emerged that Mr Ross had delivered a warning that he would go unless Lord Young was ousted or reduced to a lesser role.

According to one senior executive, the company's position is "unsustainable" and leaves C&W an obvious candidate for a bid. City analysts say that a successful suitor would have to pay at least pounds 11bn.

There has been speculation that Mr McCaw approached BT at one point to discuss a joint takeover of all or part of C&W, including the One 2 One mobile telephone operation jointly owned by C&W and US West. Mr McCaw founded McCaw Cellular, a dynamic mobile communications company, in which BT took a large stake before selling out to AT&T.

Analysts say that AT&T would also join any battle for control of the group. Another potential name in the frame is that of Nynex, the US telecommunications group with which Mr Ross is already believed to be negotiating some form of cooperation. One problem for any predator is that many of C&W's assets are in joint venture. Another is that the group's operations around the world are often licensed by national governments, who would have to approve transfer of control.

More immediately, the key to who wins the battle between Lord Young and Mr Ross is the backing of the non-executive directors, led by Mr Bischoff, chairman of Schroders. He and his colleagues were attempting last night to hammer out some solution following the meeting with the executive directors but excluding Mr Ross.

Lord Young was widely perceived as having the support of the non-executives following the announcement last Thursday that he would remain as executive chairman until his 65th birthday in February 1997. But the Ross camp is insistent he has been successful in wooing Ulrich Hartmann, a director of C&W's European partner, Veba, which has a 10.48 per cent stake in the group.

Institutional shareholders have become extremely angry at the public debacle. One said that both Lord Young and Mr Ross should go if credibility is to be restored but other City sources said that if one head rolls it should be Lord Young.

Should Mr Ross relinquish his post, the succession is far from clear. There is a view that the safest pair of hands would be those of Rod Olsen, the finance director, who has been with the group for a decade. Duncan Lewis, who in September shocked the industry by resigning as chief executive of C&W's Mercury Communications arm, could also be in the running. One source close to the company said Stephen Pettit, director for Europe, could take the top slot. Although he joined the board as recently as September, after coming to C&W in March 1994, he is said to be "on an extremely fast track".

One City analyst said: "Institutions want to see a new chairman who has a record of serving shareholders well and who would go about it in a straightforward way at C&W." Another said that both the chairman and chief executive have angered shareholders through "empire-building at the expense of short- term shareholder returns".

He added: "They have invested in disparate start-up operations all over the world ... The management has made decisions which are inappropriate and expensive."

Cable & Wireless has refused to comment, even going so far as to deny knowledge that yesterday's meetings were taking place. One insider said: "It's exciting - there is this big boardroom battle and we do not know who will win."

Comment, page 21

Start your day with The Independent, sign up for daily news emails
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions