You can see what has piqued Vodafone’s interest in CWW (not to be confused with Cable & Wireless Communications, which has been a separate company since 2009). With a market cap of £500m, the company would be an absolute bargain: its share price has lost most than two thirds of its value in the past year, not to mention two CEOs. Even more interesting is that its present CEO is Gavin Darby – the very Gavin Darby who was once the CEO of Vodafone UK. What can it all mean?
Darby’s due to present his turnaround plan for CWW, which made a £433m loss in the six months to September 2011, on Thursday. The Takeover Panel has given Vodafone until 5pm on March 12 to make a decision.
But it’s unclear what Vodafone would want to do with the company, if it did make the acquisition. Because while that valuation is based on its current share price, analysts have suggested that, were CWW broken up, its constituent parts would be worth a cool £2.5bn – including £1bn for its UK network, and £650m for its undersea cables. Apparently, Vodafone’s main interest would be in its UK-based cable network, which would help it improve its data capacity (essential as the number of smartphone users rockets).
Luckily, for CWW’s employees, separating its international networks from its domestic one would apparently be difficult. And all Vodafone will say is that ‘there is no certainty that an offer will be made nor as to the terms on which any offer might be made’. So this could be much ado about nothing…