Yesterday Tata Communications (news, filings) took itself out of the auction for cw, after the two companies were unable to come to terms on a price. Tata had inserted itself into the process in late February after Vodafone Group (NYSE:VOD, news, filings)‘s initial expression of interest two weeks earlier. I had thought Tata might have a better fit than Vodafone, but of course C&W has a say in all this as well.
Now we turn to Vodafone and its potential bid, with the latest regulatory deadline about to expire today. No other bidders seem to have emerged, and so three things could happen today: Vodafone could make a bid, withdraw, or get another extension in order to complete negotiations. I’m guessing it will be door number three, but we’ll know soon enough. If I were C&W though, I’d be loathe to sell at what seems like a low point in relative valuations for European network assets if I didn’t need to.
My thought that Vodafone might have less of a fit may be complete hogwash though, as it mostly reflects a general perception that they are mostly about mobile globally. But during this process I was given a map of the Vodafone’s current subsea and terrestrial infrastructure (now posted on my international maps page), which has helped evolve my opinion on the subject. In fact, the fit does look quite good.
Of course that doesn’t mean Vodafone will meet C&W’s price either. C&W just may decide that there will be better options in a year or two, and try to build its own momentum in the meantime.
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