France Telecom is preparing a £4b takeover bid for
Cable & Wireless, according to the telegraph.co.uk. The
takeover plan is the brainchild of Michel Combes, the chief
financial officer of France Telecom, which is 41 per cent
owned by the French state.
Combes believes that acquiring C&W could be the best way
to consolidate the French groups diverse UK interests,
which include Orange, the mobile phone group.
Since the start of May, C&W shares have risen from 120p
to close on Friday at 147p - a rise of 22 per cent - on the
back of takeover speculation.
Although this has made a takeover bid less attractive, bankers
believe that France Telecom could be prepared to sell off
some of C&Ws assets after a successful takeover.
These could include C&Ws overseas businesses, in
areas such as the Caribbean, which are worth around £1.5bn.
C&W also has around £1.1b in cash on its balance