COMPANY OF THE WEEK: Cable & Wireless
Sunday 21 March 1999
Cable & Wireless shares fell sharply on the news and were down 11 per cent on the week. Other phone companies dropped too, on the concern that Britain's telecommunications stocks may be too expensive given their profit outlook. Telecoms shares were one of the best performing sectors last year, helping push up the FT-SE 100 index but investors think they are now running out of steam and are selling.
Veba received about pounds 1.75bn for the sale, about twice what it paid in 1995, ending its last ties with Cable & Wireless. Veba's European alliance with the company ended in 1997. "For the last couple of years it's been no more than a financial investment for Veba," said Philip Carse, an analyst at Commerzbank. "Veba's got a bit of debt on the balance sheet and I guess they figure this is the right time to release plenty of cash."
Veba, which owns about half of Otelo, a German phone joint venture with rival RWE, and E-Plus, Germany's third-largest mobile phone operator, said the divestment is part of a plan to focus on its main units. Analysts said they expect Veba to use the money to beef up its loss-making telecommunications unit. "Veba may be preparing to expand in telecommunications," said Thomas Schiessle, an analyst at Bankhaus Delbrueck in Frankfurt.
The sale comes amid German reports that Veba's 1998 profit won't match the 1997 level because of losses at its Otelo phone venture with RWE and problems at its US semiconductor unit. It also comes amid speculation that Veba may raise its stake in E-Plus, buying a 17 per cent stake from Vodafone Group.
Olympic diver has made his modelling debut for Adidas
- 2 Isis release 'Flames of War' video warning Obama of attacks troops could face in Iraq
- 3 Pakistani passenger power forces two politicians off plane
- 4 Say yes to 'no-poo': It's been three years since I stopped washing my hair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Portuguese academic says British are 'filthy, violent and drunk'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...