Cable & Wireless confirms bid for Energis |
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Sun, 24 Jul 2005 12:05
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LONDON: Britain's second largest telecommunications group, Cable & Wireless has confirmed that it is interested in taking over its smaller rival Energis in a deal reportedly worth about £700 million.
At yesterday's annual meeting of the shareholders, C&W chairman Richard Lapthorne said, "We remain active in the area of corporate development and we are approaching the stakeholders of Energis concerning a possible acquisition. We cannot be certain a transaction will result." He added that any further progress on the deal would only be known by mid-August, when appropriate announcements would be made.
Energis is operated by former MP Archie Norman who was also the former chief executive of Asda. He has been reportedly approached by J Sainsbury and Wm Morrison and any takeover of Energis would mean that he is free to take up these jobs. Mr. Norman brings with him the reputation of being a turnover specialist and both the supermarket chains could benefit from his expertise.
C & W has been performing strongly this year and has recently announced that the annual profits had surged by 13 percent. The group has also embarked on an aggressive broadband Internet venture, "In broadband, over the last few weeks, Bulldog has begun to improve customer provisioning. We are encouraged by comments and feedback from customers who are experiencing its 8meg broadband and telephone services," Mr. Lapthorne told shareholders. He added that further updates on the situation in the broadband arena would be provided in November.
Any bid for Energis could be funded from the massive £1.3billion cash reserves that C & W possesses. At the meeting however shareholders were concerned about a class action suit in America, which has recently been settled for $7 million. Shareholders wanted to know if they are entitled o a share of this settlement, "You should be assured that your shareholding would not be affected in any way whatsoever," Mr. Lapthorne replied. The suit had been brought in order to recover the costs that investors felt that they had lost between August 1999 and December 2002 when the company was on an acquisition spree.
Shareholders were also informed that even though the UK market conditions were tough, C & W was maintaining its year-end forecasts and was on track to meet them.
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