London - Telecom giant Vodafone on Monday said it has reached an agreement to buy British firm Cable and Wireless Worldwide (CWW) for about GBP 1.04 billion.
India‚Äôs Tata Communications was also in fray to acquire the British firm, but had pulled out of the race after failing to reach an agreement on offer price.
With Tatas moving out, U.K.-based Vodafone ‚ÄĒ which has a major presence in India with around 150 million wireless subscribers ‚ÄĒ was the only contender left for the bid.
‚ÄúVodafone Europe and CWW have reached an agreement on the terms of a recommended cash offer pursuant to which Vodafone will acquire the entire issued and to be issued ordinary share capital of CWW,‚ÄĚ Vodafone said in a filing to the London Stock Exchange.
CWW owns 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.
The acquisition of CWW will strengthen the enterprise business of Vodafone in U.K. and internationally, the filing said. Under the terms of the agreement, CWW shareholders will receive 38 pence in cash for each CWW share held.
The filing said this is a premium of 92 per cent to the closing price of 19.8 pence per CWW share on February 10, 2012, which was the last business day, prior to the commencement of the offer period.
‚ÄúThe acquisition of CWW creates a leading integrated player in the enterprise segment of the U.K. communications market and brings attractive cost savings to our UK and international operations,‚ÄĚ Vodafone Group CEO Vittorio Colao said.
The CWW board had extended the deadline for submission of acquisition bid from February 13 to March 29 for Vodafone.
Later, the last date was extended for both Tatas and Vodafone from March 29 to April 19.
‚ÄúThe offer from Vodafone will enable shareholders to crystallise a value, in cash, that represents a significant premium to recent trading levels and avoid exposure to the risks inevitably presented by executing a medium-term improvement strategy,‚ÄĚ CWW Chairman John Barton said.
UBS is acting as sole financial adviser to Vodafone and Vodafone Group, while Barclays and Rothschild are acting as joint financial advisers to CWW.