MUMBAI (Reuters) - Tata Communications is yet to decide whether it would bid for Cable & Wireless Worldwide, a source with direct knowledge of the situation said, after a media report said the Indian company would make a formal cash offer.
“The company has time until the end of this month and a decision would be taken closer to the deadline. As of now, no decision has been taken on this,” said the source, declining to be named as the process is not public.
A spokeswoman for Tata Communications, part of the tea-to-technology Tata Group conglomerate, could not immediately be reached by Reuters for comment.
Tata Communications said in a regulatory filing on March 1 its plans for an all-cash bid for Cable & Wireless Worldwide were “at a very preliminary stage”, adding it would decide on whether to make an offer by March 29.
The Indian company will make a formal cash offer to buy Cable & Wireless Worldwide and plans to raise up to $2 billion in debt to finance the potential acquisition, Dow Jones reported on Tuesday, citing a person familiar with the situation.
Vodafone (VOD.L) has also declared its interest in Cable & Wireless Worldwide, which has issued a string of profit warnings since it split from Cable & Wireless Comms CWC.L two years ago. It also has to decide whether to bid by March 29.
Cable & Wireless Worldwide has fixed telephone lines that can be used to relieve pressure on mobile networks, and provides voice, data and other services to major British firms such as Next (NXT.L), Tesco (TSCO.L) and United Utilities.
It also has an international cable network connecting more than 150 countries, as well as five offices and 150 customers in India, which analysts said could be of particular interest to Tata Communications.
Tata Communications is seeking $2 billion in term loans to finance a potential bid for Cable & Wireless Worldwide as well as to refinance existing debt, sources with knowledge of the matter said on March 5.
Reporting by Sumeet Chatterjee and Devidutta Tripathy; Editing by Rajesh Pandathil