CWW points to poor results to back Voda bid
BRITISH telecoms firm Cable & Wireless Worldwide said yesterday a drop in earnings and no prospect of a quick upturn showed it was right to back a £1bn takeover by Vodafone despite the reluctance of its largest shareholder.
The troubled corporate telecoms service provider reported core earnings fell 14 per cent to £378m in the year to 31 March, just short of market expectations, and it also took exceptional charges totalling £606m.
Vodafone’s offer represented a more certain outcome than trying to deliver a turnaround plan in a tough market that it did not expect to get any easier, CWW said.
“The board believes the Vodafone offer represents an excellent opportunity for shareholders to realise an attractive valuation in cash today,” chief Gavin Darby said.
But Orbis, CWW’s biggest stakeholder, has refused to be seduced by Vodafone’s £1bn offer.
An Orbis spokesperson said before CWW results were published that even if the company continued along its disappointing trend, its current performance is not a good indicator of the inherent value of the company. Orbis said it had nothing to add after seeing the results.
CWW shares rose slightly to 35p.