Tata may fuel Battle for Cable & Wireless

Tata Communications is gearing up for a takeover battle with mobile phone giant Vodafone.

India’s Tata Communications is considering a bid for Cable & Wireless Worldwide in a move that could set up a takeover battle for the $1.2 billion British telecoms group with mobile phone giant Vodafone.

Troubled C&W Worldwide has fixed telephone lines that can be used to relieve pressure on mobile networks,and provides voice,data and other services to major British firms such as Next,Tesco and United Utilities.

It also has an international cable network connecting more than 150 countries,as well as five offices and 150 customers in India ,which analysts said could be of particular interest to Tata Communications.

A successful bid by Tata would be the biggest British acquisition by an India n firm since sister company Tata Motors bought Jaguar Land Rover for $2.3 billion in 2008.

The Indian company,part of the tea-to-technology Tata Group conglomerate,said in a regulatory filing on Thursday its plans for an all-cash bid were at a very preliminary stage,adding it would decide on whether to make an offer by March 29.

Vodafone said in February it was in the early stages of looking at a bid for C&W Worldwide,which has performed dismally since it split from the Caribbean-focused Cable & Wireless Communications in March 2010.

Shares in C&W Worldwide,which has issued a string of profit warnings and is now on its third chief executive,rose more than 25 percent in early London trade on hopes of a bidding war.

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At 1405 GMT the stock,which had lost more than three quarters of its value in the 18 months before Vodafone confirmed its interest,was up 15.7 percent at 32.36 pence.

Vodafone shares were up 0.9 percent at 170.9 pence,broadly in line with the UK’s benchmark FTSE-100 index,while Tata Communications shares closed up 1.1 percent in Mumbai,having risen as much as 5 percent earlier.

C&W Worldwide issued a statement noting Tata’s interest. A spokesman said the company had not received an approach.