C&W shares soar 10% as predators line up offers
Saturday 09 January 1999
In heavy trading C&W shares closed at 888.5p, up 74.5p, as reports suggested that several potential predators were preparing to make offers for the company.
C&W has been at the centre of bid speculation since last month when Dick Brown, the chief executive, unexpectedly resigned to take up a new position as chief executive of EDS, the US computer services company.
One story suggested that Ralph Robins, the chairman, had appointed the investment bank BT Alex.Brown to find a buyer for the business.
C&W refused to comment, but observers said the speculation made sense given that the company's shares were still trading at a large discount to break-up value of its assets.
Chris Godsmark, telecoms analyst at Henderson Crosthwaite, said: "We think a break-up or a sale of C&W is the quickest way to realise shareholder value, given that the company is without a chief executive." The broker estimates C&W's break-up value at 1,100p a share.
One possibility mooted was a bid organised by Global One, the international alliance in which Deutsche Telekom, Sprint and France Telecom are partners.
However, a range of other potential bidders are likely to be interested in C&W, which has interests in attractive telecoms assets, including controlling stakes in Hong Kong Telecom and Cable & Wireless Communications, the UK's largest cable operator.
Experts said any bid would have to be agreed by the board because a hostile bidder would be forced to buy out the minority shareholders in Hong Kong Telecom as well.
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