LONDON - British telecommunications giant Cable & Wireless has successfully completed the takeover of rival firm Energis in a deal worth £674 million. This announcement ended the drama that surrounded the Energis takeover what with a last-minute bid by Scottish telecoms group, Thus. The £800 million bid by Thus group had been rejected on Monday by Energis citing the fact that the group was offering less cash than Cable & Wireless.
Cable & Wireless, which happens to be Britain's No. 2 fixed-line operator, said that it would be paying £594 million initially, followed by the remaining £80 million in shares or cash over a period of three years. The company also said that the cost savings accrued as a result of the Energis takeover would help it to balance the slide in the old technologies sector as well as help it gain a firmer foothold in the new technologies. Energis specializes in providing phone and Internet services, two essential tools of the modern era.
Cable & Wireless (C&W) also announced that it would be momentarily suspending its share buyback program until a workable integration with Energis becomes a reality. C&W chief executive Francesco Caio was enthused at having acquired Energis and said that the deal would "accelerate the strategic transformation that we have undertaken in the last 15 months." He however said that the company was "realistic about the short-term prospects of the combined business." Caio was emphatic in stating that the company would not relax after having acquired Energis, "By having done this deal, we are not going to alter the fundamental trends we are seeing out there of very strong competition and pricing pressure. But we now have the opportunity to tackle a wider cost base," he said. The company also said that it would be downsizing at least 700 jobs by 2008 in an effort to save costs.
Cable & Wireless shares were down 7.75 pence to 155.25 pence in the early afternoon trading.
Posted
on : Tue, 16 Aug 2005 17:50 GMT | Business News
By : Anne Philips
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