Tata Comm mulls bid for C&W Worldwide
Tata Comm mulls bid for C&W Worldwide
Mumbai: Tata Communications Ltd on Thursday said it is evaluating a potential bid for Cable & Wireless (C&W) Worldwide Plc, in what could be the biggest British acquisition by an Indian firm since sister company Tata Motors bought Jaguar Land Rover.
Tata Communications’ considerations were “at a very preliminary stage", the company said in a regulatory filing, adding it would have to decide on an offer for the firm, which has a market capitalization of around $1.2 billion, by 29 February.
The Indian company, part of the tea-to-technology Tata Group conglomerate, would be vying with Britain’s Vodafone Group Plc , which said in February it was considering a bid for C&W Worldwide.
Standard Chartered Plc is the financial adviser to Tata Communications, the company said in the filing, adding it was considering an all-cash offer for C&W Worldwide.
A spokesman from C&W Worldwide said the company had not received an approach from Tata Communications.
C&W Worldwide, which has issued a string of profit warnings since its demerger from Cable & Wireless Communications in March 2010, has fixed lines that are used by mobile operators to provide links to mobile transmitters and switching offices.
It also provides voice, data and hosting services to major British companies such as Next, Tesco and United Utilities, and retains an international cable network connecting more than 150 countries.
Poor Financials
Tata Communications owns undersea cable assets and provides telecoms and Internet services to companies across countries. The potential acquisition would provide it with a larger footprint in voice and data carrier businesses as well as in the undersea cable network.
But Tata Communications’ poor financials -- it has posted losses in the past two fiscal years to March 2011 and also in the first nine months of the current fiscal year -- and the Indian government’s substantial stake could restrict it from bidding aggressively.
Tata Communications, which a so has a New York listing, is a former Indian state monopoly in which Tata Group took a 50% stake in 2002. The Indian government still owns 26% of the firm and has nominee directors on the company’s board.
C&W Worldwide has stumbled from one crisis to another since it split from the Caribbean-focused international half of the former Cable & Wireless. It announced writedowns of £624 million ($997 million) in November.
Tata Motors, also part of the sprawling Tata Group, paid $2.3 billion for luxury British carmaker Jaguar Land Rover in 2008.
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