Tata Communications is evaluating a possible cash offer for Cable & Wireless Worldwide as part of its on-going review of potential acquisition opportunities, the Indian company said in a filing to the stock exchanges.
However the considerations are “at a very preliminary stage and there can be no certainty that an offer will be made,” the notice said. “A further announcement in respect of this matter would be made in due course.”
TCL has time till 5 p.m. on March 29 to decide whether to make an offer. Standard Chartered Bank is the company's financial advisors, its announcement said.
Big network
CWW has a market capitalisation of about $1.2 billion. It was demerged from Cable & Wireless Communications in March 2010. It has an international cable network and provides voice, data and other services to some large British companies.
Tata Communication itself has a global network connecting more than 200 countries; it runs data centres and delivers managed solutions to multinational enterprises, service providers and Indian consumers.
While CWW has issued recent profit warnings, Tata Communications itself has reported net losses for the last couple of years as well as for the current fiscal to date. This is chiefly due to its previous acquisition, its South African arm Neotel, which is yet to turn in net profits.
The other company reported to be considering an offer for CWW is the British company Vodafone.
The stock of Tata Communications gained by 1.22 per cent on the BSE on Thursday, to close at Rs 235.60. The scrip went as high as Rs 245.20 during the day.