C&W Details THUS Offer

Cable & Wireless details proposal to THUS

June 6, 2008

3 Min Read

LONDON -- Cable and Wireless plc (“Cable & Wireless”) confirms that on 28 May 2008 it approached the Board of Thus Group plc (“Thus”) in relation to a possible cash offer for the company at a price of 165 pence per share. Thus has since informed Cable & Wireless that it would not be prepared to recommend an offer at this level or enter into discussions.

Cable & Wireless is disappointed in Thus’ response since it strongly believes that 165 pence, representing a 50 per cent premium to the Thus share price on the day before its approach, is an attractive reflection of the value of Thus’ standalone business and the benefits of the proposed business combination.

Cable & Wireless believes that, in the changing telecoms environment, scale is critical and only operators with significant scale and cost advantage will be able to sustain the investment required to attract higher margin revenues. Accordingly, Cable & Wireless believes that its proposal offers an attractive future for Thus and its customers, as Thus would become part of a larger, stronger group with greater scale, product and service capability and financial strength.

For Cable & Wireless, an acquisition of Thus would allow it to develop further the value of its Europe, Asia & US business (“EAUS”) within its established strategic framework and accelerate its growth plans. In particular, the acquisition of Thus would:

  • Accelerate EAUS’ growing market share of large enterprise and government customers; and

  • Produce savings in outpayments, operating costs and capital expenditure.

Cable & Wireless is also comfortable that its existing EAUS business is a strong platform from which to deliver the long term targets that have been set for the business on a standalone basis. As such, Cable & Wireless views Thus as an incremental opportunity that would be additive to its existing plans for value realisation. However, Cable & Wireless is also keen to ensure that its existing timetable to consider value realisation options in 2008/09 is unaffected by the proposed acquisition.

Against this background, Cable & Wireless considers that it is not in its shareholders’ interests to engage in an extended process to try to persuade the Board of Thus to enter into discussions. Cable & Wireless is therefore today announcing a self-imposed deadline of 5:00pm on 30 June 2008 either to announce a firm intention to make an offer for Thus under Rule 2.5 of the City Code on Takeovers and Mergers (the “Code”) or to announce that it does not intend to make an offer for Thus*, unless the Takeover Panel otherwise agrees.

Cable & Wireless considers that its proposal represents a full and fair offer which unlocks value for Thus shareholders which would not be available to them on a standalone basis. Accordingly, Cable & Wireless hopes that the Board of Thus will reconsider its refusal to discuss the Cable & Wireless proposal.

This announcement does not amount to a firm intention to make an offer and accordingly there can be no certainty that any offer will be made. A further announcement will be made in due course if appropriate.

Cable and Wireless plc (NYSE: CWP)

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