Cable and Wireless has finally won its battle to take over network operator THUS in the UK. C&W originally bid £1.65 and was rebuffed. They raised their bid to £1.80 and were rebuffed again, but this time they held their ground. The THUS board said they were worth more like £2.52, and tried mightily to drum up other interested parties. But in the end only C&W was sitting at the table. By mid August C&W had managed to roll up 73% of THUS's shares, forcing THUS's board to give in to the inevitable.
So what does this mean? C&W will add THUS's 10,500 kilometers of fiber, 190 POPs, £600M revenue and £60M EBITDA to its arsenal. Like many US telecoms, THUS had been seeing excellent growth in ethernet and IPVPN solutions, offset by declines in older non-core products. The purchase will give C&W greater depth in northern England and in Scotland, where THUS began its life, and greater scale in the education and government sectors.
While it will mean pain for some when the layoffs come, the UK telecom sector has been in desperate need of some consolidation. There was speculation that GCUK might be up for sale, however given that THUS didn't get a better price, Global Crossing is probably not so eager to give up its best division.
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