Vodafone mulls Cable & Wireless bid

Vodafone is mulling a potential takeover bid for struggling telecoms firm Cable & Wireless Worldwide, the mobile phone giant confirmed today.

In a brief statement to the stock market, Newbury-based Vodafone said it was in the early stages of evaluating the merits of a deal for C&WW, which sells telecoms and internet services to major UK businesses.

A weekend newspaper report claimed Vodafone would need around £700 million to buy C&WW, which is also thought to be in the sights of private equity firm Apax.

The interest has been spurred by the collapse in CWW’s share price since it split from Cable & Wireless’s Caribbean-based telecoms arm in 2010.

It has been impacted by the squeeze on UK 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.

Former Vodafone executive Gavin Darby, who in November became the company’s third chief executive in around a year, is expected to provide early details of a turnaround plan alongside a trading update on Thursday.

Shareholder anger over the company’s plight has been fuelled by the estimated £20m pocketed in bonuses by former bosses John Pluthero and Jim Marsh before trading started to unravel.

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 division at a time of slowing consumer growth.