VODAFONE has won shareholder approval to complete its £1.04 billion takeover of Cable and Wireless Worldwide (CWW) after Orbis Investment Management threw its weight behind the bid.
Bermuda-based Orbis has a 19.06% stake in CWW, which employs more than 100 people in Glasgow through its Thus subsidiary, and initially felt the 38 pence per share approach was too low. However, following a weekend of talks Orbis performed a U-turn and yesterday voted to approve the 38 pence per share deal at a shareholder meeting in London.
That led to more than 87% of voting shareholders, representing 99% of the shares, backing the deal.
Prior to the meeting almost 59% approval had been secured but Orbis falling into line took Vodafone above the 75% needed to progress with the acquisition which will see the company become the number two provider of telecoms in the UK behind BT. The fund manager backed down following talks over the weekend which led it to believe the takeover was certain to succeed even without its support.
Orbis said: "Our opposition would only serve to prolong the process because the company would likely adjourn the meetings to secure the necessary votes. This is not in the interests of any CWW stakeholder. Accordingly, Orbis intends to vote in favour of the scheme."
Analyst Nick Brown, of Espirito Santo Investment Bank, said: "Vodafone has taken advantage of CWW's shares trading at quite a depressed multiple at the time they came in with their bid.
"We believe that the value to Vodafone is around 50 pence if not north of that, depending on what they do with the company."
Vodafone is keen on using CWW's 20,500 kilometres of fibre cabling covering 400 towns and cities to relieve the strain smartphone users are placing on its wireless networks.
The addition of corporate customers such as Tesco should also aid Vodafone at a time of restrained consumer spending.
Analysts also believe CWW's 260,000 miles of undersea cables may be sold in a deal worth around £500m but Vodafone has stayed tight-lipped on the speculation.
The agreement still has to pass regulatory requirements but if approved dealing in CWW shares will be suspended on July 25. A court date to approve the scheme of arrangement will follow the next day with the takeover formally expected to complete on July 27.
CWW said: "If the scheme becomes effective on 27 July 2012, it will be binding on all CWW shareholders, whether or not they attended or voted in favour of the scheme and the special resolution at the meetings."
Indian firm Tata Communications walked away from takeover discussions earlier this year, leaving Vodafone as the sole runner.
CWW, headed by chief executive Gavin Darby since November last year, has seen its shares fluctuate between a high of 98.5 pence and a low of 13p since it split from its Caribbean-based telecoms arm in 2010.
It had bought the former FTSE-100 member Thus, previously called Scottish Telecom, for £329m in 2008. Shares in CWW ended the day up almost 8% at 37.77p with Vodafone's also up 0.69% at 174.9p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article