The withdrawal by India’s Tata Communications, after it failed to agree on an offer price with Cable’s board, leaves rival Vodafone facing a deadline of this evening to announce whether it intends to proceed with a bid.
The absence of a takeover battle between the two parties was reflected in Cable’s share price, which slumped 23 per cent, valuing the firm at £780 million.
Cable provides high-speed telecoms services to the police and companies including Tesco and would be attractive to Vodafone as the mobile phone firm looks to grow its corporate arm at a time of slow consumer growth.
The interest in Cable has been spurred by the collapse in its share price since it split from Cable & Wireless’s Caribbean-based telecoms arm in 2010.
The company has been impacted by the squeeze on Government spending and the weak economy, leading it to report heavy losses for the six months to 30 September and warn of no dividend payments in order to bolster its balance sheet.
Tata confirmed it was pulling out last night, on the eve of today’s Takeover Panel deadline for Vodafone and Tata to confirm their bid intentions.
It said it has been unable to reach agreement with Cable on an offer price and “therefore confirms that it does not intend to make an offer”.
Reports suggest Tata was considering an offer between 30p and 40p per share, but that some shareholders wanted a price in the high 40s, potentially worth as much as £1.3 billion.
Tata already has significant interests in the UK through Tata Steel Europe, which owns major steelworks at Port Talbot and Scunthorpe, and Tata Motors, which has engineered a turnaround in fortunes at Jaguar Land Rover.