Cable & Wireless poised to win bid for IDC

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The Independent Online
CABLE & WIRELESS was poised last night to win its heavily-contested bid for International Digital Communications, the Japanese long- distance carrier, after Nippon Telegraph and Telephone (NTT), Japan's incumbent operator, said it would not raise its offer.

C&W raised its bid last week and now values IDC, including the UK firm's 17.7 per cent interest, at pounds 360m. The move gave Graham Wallace, the C&W chief executive, a much-needed victory in Japan's first-ever cross- border takeover battle.

NTT appeared to give up the fight yesterday when it issued a statement saying: "Our offer last Monday for IDC shares is the final one."

Sources at NTT, which is the world's largest telecoms company, admitted it would seek to build its own international long-distance business.

C&W's chances of winning IDC have been boosted by indications that many smaller shareholders would back it. Insiders said that among the likely backers for C&W was 10 per cent IDC shareholder Airtouch, the US mobile phone operator merging with Vodafone.

The support effectively delivered more than 50 per cent of the shares to C&W and left Japanese conglomerate Itochu and carmaker Toyota, each with a 17.7 per cent interest in IDC, with little choice but to back the highest bidder.

Victory for C&W has come at a high price. The firm, which carries about 20 per cent of outgoing Japanese telecoms traffic, was valued at pounds 200m before the bidding war started. But owning IDC will allow C&W to begin expanding into Japan's pounds 60bn a year telecoms market - the world's second largest after the US.

At one point, C&W looked likely to fall victim to Toyota and Itochu's desire to keep IDC in Japanese hands, irrespective of which group made the higher offer. But pressure from both London and Washington proved an apt reminder to the Japanese government of its prior agreement to open up the country's markets and promote telecoms competition.

"Our argument rests primarily on price and on our position as a founder shareholder," said a C&W spokesman, who said there would be no redundancies at IDC.

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