Member Article

Vodafone approach for Cable & Wireless Worldwide

Markets reacted well to developments in Greece over the weekend where 199 Greek politicians (out of a potential 300) voted in approval of the new bailout package. It moved the country closer to securing an international bailout and hence avoiding a chaotic default, although smouldering buildings in Athens this morning were testament to public outrage at further rounds of austerity. Additionally, 43 rebellious politicians were expelled from their parties for not falling in line with the vote, concerns very prevalent that the wage and job cuts will plunge the country, already in its 5th year of recession, deeper into economic hardship.

In keeping with recent risk on rallies, banking and mining stocks were the main beneficiaries and populated the FTSE 100 leader board, the index itself was up around 1%, a level that it maintained for most of the day.

Whilst the index of blue-chip stocks saw modest price movements in both directions, Cable & Wireless Worldwide was the biggest gainer in the FTSE 350. The fixed line telecommunication group was supported by a Sunday Times article that suggested Vodafone and a private equity group Apax Partners were exploring possible bids for the group. It was claimed that both suitors were seeking to take advantage of a collapse in Cable’s share price since it was spun out of its parent group in 2010 and has since lost around 80% of its value. Many analysts endorsed the deal and noted the strategic fit, Cable & Wireless shares put on 8.79p finishing 44.5% higher at 28.54p whilst Vodafone ended 1% higher.

The FTSE 100 closed up 0.9%, higher by 53 points to 5905, just below key resistance levels.

This was posted in Bdaily's Members' News section by James .