Mobile phone group Vodafone’s 1.04 billion-pound offer for Cable & Wireless Worldwide looked certain to succeed on Monday after the British fixed line operator’s biggest shareholder dropped its opposition.
Institutional investor Orbis said it would now support the 38 pence-a-share offer after CWW revealed that holders of 59 percent of its shares had already backed the takeover. Vodafone needs the support of 75 percent of voting shareholders for its scheme of arrangement to succeed.
Bermuda-based Orbis, which holds 19 percent, said that it had taken a pragmatic decision that Vodafone would likely adjourn the shareholder meetings in order to obtain the necessary support, even without Orbis’s backing.
“This is not in the interests of any CWW stakeholder,” Orbis said in a statement. “Accordingly, Orbis intends to vote in favour of the scheme at the meetings today.”
The news sent shares in Cable & Wireless Worldwide up 8 percent to 37.8 pence. Vodafone shares were down 0.2 percent.
The announcement appears to bring an end to the takeover saga. Orbis had criticised Vodafone’s offer, saying it undervalued a company that served many businesses and government departments, had a British fibre optic network and cables that spanned the world.
It had said it would be willing to remain a minority shareholder in a Vodafone-controlled CWW, but that would require Vodafone switching the bid to a tender offer, something the mobile phone company ruled out last week.
In buying CWW the mobile giant will get to boost its business with companies and offer combined fixed and mobile services, as well as gaining access to CWW’s fibre network which can be used to relieve pressure on its mobile network from data-hungry customers.