Telecom Lead Europe: Institutional Shareholder Services
(ISS) has recommended the proposed 1 billion euro bid placed by Vodafone for
Cable & Wireless Worldwide.
Vodafone needs to obtain acceptances from shareholders
holding 75 percent of the company’s stock for its scheme of arrangement to
succeed.
However, if Vodafone does not get the required
majority, it could switch to an alternative type of bid that is a tender offer.
ISS has proposed that CWW’s shareholders should accept the
38p a share bid from Vodafone.
Based on reasonable sale process with two bidders, adequate
valuation and the risk that investors face in going through a difficult
turnaround, we recommend shareholders support the Vodafone offer,” an official
ISS statement said.
Vodafone has support from holders of 18.6 percent of the
shares, along with pledges from about another 10percent, reported the
Telegraph.
Orbis, CWW’s largest shareholder, with 19 percent, has
rebuffed the bid, though it said it would be comfortable being a shareholder in
a Vodafone-controlled group.
Institutional Shareholder Services is influential with small
shareholders and private client stockbrokers, who hold roughly 10 percent of the
stock.
The shareholder vote to decide on the scheme of arrangement
will take place on June 18. However, Vodafone will have to face a possibly
tricky vote of its own at its annual general meeting over directors’ pay in
July.
The proposed acquisition will assist Vodafone to
become a full integrated telecom company with focus on mobile, fixed line and
long distance calls.
Vodafone gets more time to finalize CWW acquisition bid
C&WW specializes in providing communication networks and
services to large corporates, governments, carrier customers and resellers. Its
services include managed voice, data and IP-based services and applications
across the UK, Asia Pacific, India, Middle East & Africa, Continental
Europe and North America.
Earlier, India’s Tata Communications was also in
battle to acquire the British firm, but it pulled out of the race after failing
to reach an agreement on offer price. As TCL withdrawn, UK-based telecom giant
Vodafone becomes the only contender for the bid.
