According to reports this morning, Tata Communications (news, filings) says it is evaluating a potential all-cash bid for Cable & Wireles Worldwide. While discussions are at an early stage, the Indian telecommunications conglomerate would need to make a decision by March 29.
Two weeks ago, it was Vodafone admitting that it was kicking the tires at C&W Worldwide. At that time I did suggest that other buyers might emerge, and I think Tata could be a serious one. They would clearly be in a position to derive substantial synergies from the international business. The undersea asset fit would be quite complementary, bringing the Apollo and TGN Atlantic cables under one roof, for example. Also, Tata has been pushing hard for a bigger slice of the multinational enterprise market and this would give them a big boost. Meanwhile the UK fiber network and enterprise business would be an interesting addition that they could build on.
But I still think this story may develop further, as the rumored pricing still seems low to me and more buyers may yet emerge from the woodwork. I mentioned Pacnet and Level 3 earlier, but there are other possibilities. I doubt Tata’s rival Reliance is in a position to compete given the continued rumors that they want to sell off their own international division to raise cash. But Teliasonera – now there’s an idea. Their international carrier division has been quite aggressive lately, and the C&W assets could give them much greater international scope.
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