Tata Comm eyeing C&W Worldwide: Report
Tata Communications Ltd is preparing to bid for Cable & Wireless Worldwide Plc, the Times of India reported on Thursday, in what would be the biggest British acquisition by an Indian firm since Tata Motors bought Jaguar Land Rover.
The paper, citing sources directly briefed on the matter, said a bid could possibly be made in the next two weeks.
Tata Communications would be vying with Vodafone Group, which said in February it was considering bidding for C&W Worldwide, whose fixed-line network could boost bandwidth for its Internet-hungry customers.
A source with knowledge of the situation said that C&W Worldwide had been pitched to Tata Communications as part of the sale process, but the Indian company had not made any decision to make a formal bid for the company.
The company was unlikely to make an aggressive bid given its poor financials and the fact the Indian government retains a substantial holding, the source said.
The Times of India report said C&W Worldwide could fetch a valuation of more than $1.2 billion, and provide Tata Communications with a larger footprint in voice and data carrier businesses as well as in the undersea cable network.
A Tata Communications spokeswoman could not comment immediately. Cable & Wireless Worldwide declined to comment.
Tata Motors, part of the sprawling Tata Group which also owns 50 per cent of Tata Communications, paid $2.3 billion for luxury British carmaker Jaguar Land Rover in 2008.
PROFIT WARNINGS
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.
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 write downs of 624 million pounds in November.
Tata Communications, which also has a New York listing, is a former Indian state monopoly in which India's tea-to-technology conglomerate Tata group took a 50 per cent stake in 2002. The Indian government still owns 26 per cent of the firm.
The company, which owns undersea cable assets and provides telecoms and Internet services to companies, has posted losses in the past two fiscal years to March 2011 and also in the first nine months of the current fiscal year.
Shares in Tata Communications, which the market values at $1.4 billion, rose as much as 3.8 per cent in the Mumbai market on Thursday, while the broader market index was trading 0.8 per cent lower.
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