Vodafone’s C&WW deal on the rocks

Vodafone’s C&WW deal on the rocks

Vodafone's £1 billion takeover of Cable & Wireless Worldwide (CWW) is on the rock as the telecoms provider's biggest shareholder is planning to block the deal.

A bid of 38p per share was accepted from Vodafone and the proposal has received support from around 18 per cent of shareholders, but Orbis Investment Management may take action to scupper the takeover.

It holds more than 19 per cent of the shares, so it could effectively block the deal, and has stated that it is not happy with the offer price, even though it represents a 92 per cent premium to the price CWW was trading at before news emerged that Vodafone was considering a bid.

The firm increased its holdings at an average price of 53p per share, which means the Vodafone deal would lead to losses for Orbis.

Orbis held 6.8 per cent of the share back then and has increased its holding at an average of 53p per share over the past two years, according to reports based on banking sources.

"Although we believe the CWW management team has handled the bid process responsibly, we have declined to give an irrevocable undertaking or letter of intent to support the transaction," Orbis said in a statement.