It commented: “Vodafone regularly reviews opportunities in the sector and confirms that it is in the very early stages of evaluating the merits of a potential offer for CWW. There is no certainty that an offer will be made nor as to the terms on which any offer might be made. Any offer, if made, will be in cash but Vodafone reserves the right to change the specie of consideration. A further announcement will be made in due course, if appropriate.”
David Molony, principal analyst at Ovum believes this is not a UK telecoms story but very much a global telecoms story. In reaction, he said: “The appointment of Gavin Darby from Vodafone as the new chief executive at CWW last year should have been a clue, but it still took everybody by surprise, as the market reaction shows.
“A merger would give Vodafone significant global network for fixed services to complement or even integrate with its mobile operations worldwide, and give it a significant position in global enterprise services. Second, it fits with an Asia-Pacific growth strategy for Vodafone - CWW has the highest penetration of the business fixed services market in Asia-Pacific of the European and US-owned telecoms service providers.
“However, becoming a fully-integrated telco will make life complicated for Vodafone too. It has some major contracts with global MNCs that get their fixed services from other telcos like BT. Those customers who want more collaboration on fixed-mobile services will wonder where Vodafone's ownership of CWW leaves them,” concluded Molony.
In accordance with Rule 2.6a of the Takeover Code, Vodafone is required to, by not later than 5pm on 13 March 2012, either announce a firm intention to make an offer in accordance with Rule 2.7 of the Takeover Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Takeover Code applies unless the Panel on Takeovers and Mergers has consented to an extension of this deadline.