Shares of Tata Communications Ltd (TCL) jumped after the company confirmed its interest in UK telecom major Cable and Wireless Worldwide (CWW) through a notice at the Bombay Stock Exchange (BSE).
While TCL’s shares gained 1.2% on Thursday to end at R235.6 on BSE, CWW shares were trading up at 16% on the London Stock Exchange at £32.3. They had ended at £27.9 on Wednesday.
“As part of its ongoing review of potential acquisition opportunities, Tata is evaluating a possible cash offer for CWW,” TCL said in a statement. “Tata would like to emphasise that considerations are at a very preliminary stage.”
TCL also added that it has until Match 29 to either make a firm offer for buying out CWW or announce that it does not intend to make an offer. The deadline can be extended, the company said on its website.
Vodafone Group, which is also currently evaluating a possible offer for buying out CWW, has until March 12 to either make a firm offer or walk away. On Wednesday, the telecom company invested £223 million in CWW to purchase 2.2 million convertible bonds.
CWW owns the UK’s largest fibre network servicing enterprise businesses and has an international cable network that spans across Europe, India and throughout Asia. It also connects Asia and Europe.
“Tata Communications is in international mobile business and CWW would be an attractive prospect if the price is right,” said Mahesh Uppal, director, Com First India, a telecom consultancy firm. “TCL may see this as a way to respond to the new reality of the telecommunications business and this acquisition would allow it to become a larger international player with a bigger footprint.”