A £1bn takeover battle for Cable & Wireless Worldwide was brewing today after India’s Tata declared its interest in the struggling firm.
The conglomerate’s communications business said it was in the early stages of evaluating an offer for CWW, which is also in the sights of mobile phone giant Vodafone.
Shares in CWW, which sells telecoms and internet services to major UK businesses, soared 18% to give it a market value of just over £900m.
Vodafone has until March 12 to declare whether it intends to make an offer for CWW, while under takeover rules Tata has a deadline of March 29.
Tata, whose main focus is on emerging markets, has one of the world’s largest undersea cable networks.
The interest in CWW has been spurred by the collapse in its share price since it split from Cable & Wireless’s Caribbean-based telecoms arm in 2010.
The company has been impacted by the squeeze on Government spending and the weak economy, leading it to report heavy losses for the six months to September 30 and warn of no dividend payments in order to bolster its balance sheet.
As well as tough trading conditions, chief executive Gavin Darby said last month that the business telecoms firm was over complex and blighted by under-investment.
Cable provides high-speed telecoms services to the police and companies including Tesco and would be attractive to Vodafone as the mobile phone firm looks to grow its corporate arm at a time of slow consumer growth.