Cable and Wireless increases offer to snatch rival

CABLE and WIRELESS is sweetening its offer for Thus by up to £27m as the two companies work on an agreed takeover that could be recommended to shareholders tomorrow morning.

Talks began late last week after the Scottish telecoms group failed in its quest for a white-knight bidder.

Thus, led by chief executive Bill Allan, had shunned discussions since CandW's approach on May 28, arguing that 165p a share, or £302m, significantly undervalued the company.

CandW is expected to increase its cash offer to the range of 175p-180p, valuing Thus at up to £329m.

Pressure from shareholders forced the company to the table. CandW's self-imposed deadline to announce a firm intention of making an offer for Thus or walking away passes at 5pm tomorrow.

Thus shares fell 5% last week, closing at 145p on fears that no deal would be done. The company was also dealt a blow after losing a contract to supply Sky customers with home phone services.

Philip Rogerson, Thus's chairman, is thought to have reestablished contact with Richard Lapthorne, his counterpart at CandW.

Global Crossing and Colt Telecom both contacted Thus with proposals, but no concrete counterbid emerged.

The company would be a useful bolt-on for CandW. Chief executive John Pluthero is trying to bulk up domestic revenues so it can demerge its international arm later this year.

Thus holds contracts with a number of blue-chip companies, including HSBC and Royal Bank of Scotland.

Allan, who has led the company since it was spun out of Scottish Power, is expected to leave once a deal has gone through. He spent 26 years working for CandW and still has a pension with the company.

source: timesonline.co.uk 29-06-2008

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