C&W will now discuss the approach with the other shareholders in Bouygues, which include Telecom Italia, the German utility giant Veba, and the French construction company Bouygues, which each have the right to match the bid.
European mobile phone companies have soared in value since C&W, which has been selling its minority investments around the world to focus on business customers, first offered the stake to Telecom Italia in April last year. At the time C&W valued the business at pounds 456m.
"Mobile stocks have increased a lot since they were trying to sell it last year, and it was just a question of how much more,'' C&W would get, said Paul Sharma, an analyst at Investec Henderson Crosthwaite. "This price seems to be in the right ballpark of what the market was expecting.''
Soaring demand for mobile phones, and merger speculation following Vodafone's $74.1bn takeover of US-based AirTouch Communications in January, have boosted the value of mobile phone and other telecoms-related stocks.
C&W has been in talks about the Bouygues Telecom stake for several months as part of the company's effort to sell off businesses where it does not have management control. It wants to focus on providing data and Internet services to businesses instead.
The shareholder pre-emption right on the stake could clear the way for Bouygues' chairman and chief executive, Martin Bouygues, to fulfil his ambition of raising his company's 34 per cent stake in the mobile operator.
The company, which isn't expected to break even until 2001, is aiming to double its subscribers this year to 2.7 million.
Recent reports have suggested that Bouygues may ask BDT, the holding company through which Bouygues, Telecom Italia and Decaux own their stakes, to issue debt to finance a purchase.
C&W sold its underwater cables business for pounds 540m in April. But the most closely watched sale will be the disposal of One2One, the UK mobile phone company it owns with MediaOne.
Companies, including Deutsche Telekom and France Telecom, are reported to have bid as much as $16bn (pounds 10bn) for the company. C&W will cut a list of bidders for its stake to no more than four by mid-June.
C&W shares closed 11p higher at 802.5p yesterday.Reuse content