C&W sold the stake, on which it will record a pre-tax profit of pounds 525m upon completion in mid-July, to parent company Bouygues, which has construction and other interests.
Bouygues, under a shareholder agreement governing the unit, exercised its option to pre-empt a similar offer from unnamed financial investors who were not shareholders in the telecoms venture. Last year, C&W sought to sell the stake to Telecom Italia as part of a plan that soon collapsed to create a long-term strategic cooperation pact between the companies.
"We are pleased to have settled the matter of this sale, which is part of our programme of focus on businesses where we have management control or substantial influence," said Stephen Pettit, executive director of corporate development. In recent months, C&W has again sought to narrow its far-flung interests and now plans to concentrate on providing services to business and building a global presence in handling Internet traffic.
Since C&W originally put the Bouygues interest up for sale, the value of mobile assets has risen sharply, although minority stakes are often discounted in comparison to the fuller valuations given to entire companies or controlling interests.
Meanwhile, Deutsche Telekom, which sources say has effectively withdrawn from the auction by refusing to up its bid for One2One, refused to comment on the matter yesterday. One2One is co-owned by C&W and MediaOne.
ABN Amro, house broker to C&W, has put a pounds 10bn value on One2One, Britain's smallest mobile company, even though it has yet to turn a profit. Germany's Mannesmann is a declared bidder, while France Telecom and French conglomerate Vivendi are also believed to be in the running.