Outlook: Cable & Wireless

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CABLE & WIRELESS is becoming an investment banker's dream. Few major companies have switched their chief executive or strategy quite so frequently as C&W in recent years, and if no one else is applauding, fee earning bankers are positively bringing the house down with delight. The number of bits and pieces being sold or acquired in this corporate version of permanent revolution almost defy belief.

Never happy with one fee if two will do, Merrill Lynch has dreamed up another lucrative wheeze to add to the feast. A financing company is being created that will acquire C&W's 50 per cent interest in One2One while C&W continues to ruminate on whether to float the mobile phone operator or sell to a trade buyer. When finally a decision is reached, C&W will be able to acquire the stake back and sell it on in the normal way. The effect is like a short term mortgage on One2One ; C&W gets immediate use of the money and all the upside if the eventual sale price is more than the pounds 3.8bn the finance company is paying.

No one's saying how much this intrigueing piece of financial engineering is costing but that it doesn't come cheap is not being denied. To agree to it at all, C&W must be quite seriously knocking up against its existing banking facilities. Eventually, ofcourse, it won't need those facilities; the money from One2One and other asset disposals will be sufficient to pay off the company's debts. But in the meantime, the City cleans up - again.

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