Vodafone Europe BV and Cable & Wireless Worldwide plc (“CWW”) on Monday announced that they have reached 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. It is intended that the Offer will be effected by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
Under the terms of the Offer, CWW Shareholders will be entitled to receive 38 pence in cash for each CWW Share held, representing a premium of approximately:
The Offer values the entire issued ordinary share capital of CWW at ~£1,044mn.
The Offer price of 38 pence per CWW Share is final and will not be increased, Vodafone said.
Vodafone said that it reserves its right to increase the Offer if a third party announces a possible offer or offer for CWW.
The CWW Directors have agreed to recommend unanimously that CWW shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting.
Vodafone said that it has received irrevocable undertakings from RBC Global Asset Management Inc., Sky Investment Counsel Inc. and Cyrte Investments GP I BV to vote in favour of the Scheme.
RBC Global, Sky Investment and Cyrte Investments hold 284,532,092 CWW shares, representing ~10.35% of the ordinary share capital of CWW.
Vodafone has also obtained letters of intent from JP Morgan Asset Management Ltd. and Investec Asset Management Ltd. to vote in favour of the Scheme.
JP Morgan Asset Management and Investec hold 223,446,160 CWW shares representing, in aggregate, approximately 8.13% of the ordinary share capital of CWW.
Commenting on the Offer, John Barton, Chairman of CWW, said, “Under the leadership of Gavin Darby, Cable & Wireless Worldwide has outlined a strategy to refocus the business on achieving sustainable cash generation and returns from capital invested. However, the offer from Vodafone announced today 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. Furthermore, the combination with Vodafone represents an exciting opportunity for Cable & Wireless Worldwide’s customers, employees, partners and other stakeholders to benefit from the many advantages that will come from being part of the Vodafone Group.”
Commenting on the Offer, Vittorio Colao, CEO of Vodafone Group, said, "We are pleased to reach agreement with the Board of Cable & Wireless Worldwide, who unanimously recommend our offer. The acquisition of Cable & Wireless Worldwide creates a leading integrated player in the enterprise segment of the UK communications market and brings attractive cost savings to our UK and international operations. We look forward to working with the management and employees of Cable & Wireless Worldwide to combine our expertise for the benefit of our customers and shareholders.”
UBS is acting as sole financial adviser to Vodafone and Vodafone Group.
Barclays and Rothschild are acting as joint financial advisers to CWW.
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