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Technology Stocks : PCW - Pacific Century CyberWorks Limited

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To: ms.smartest.person who wrote (888)	4/1/2001 5:20:32 AM
From: ms.smartest.person	Read Replies (1) of 2248

Predators circle at Cable & Wireless By Clayton Hirst 31 March 2001 Bargain-hungry buyout firms are circling Cable & Wireless, the British telecommunications company, as its cash pile mounts but its share price falls. It is understood Kohlberg Kravis Roberts (KKR), the US leveraged buyout firm, is one company running the slide rule over C&W, with a view to a possible break-up. KKR is one of the world's biggest and most aggressive venture capital companies. It is currently raising a $10bn (£7 bn) private equity fund from European and US investors. C&W is a rarity among European telecoms companies because of its huge cash surplus. The sale last week of its majority-controlled stake in Australian subsidiary Optus to Singapore Telecommunications means that C&W will have £8bn-£9bn in cash and liquid investments on its balance sheet later this year. Its core businesses are valued at £4bn-£6bn, but its market capitalisation stands at just £13.3bn as a result of last month's shock profits warning. Commerzbank last week fanned the flames of speculation that C&W is vulnerable to a bid. In a research report, the German securities house said: "At these levels [a bidder] could afford to make a share offer without seeing any dilution to their own valuation multiples. Cable & Wireless ... is rapidly becoming a classic leverage buyout candidate." Graham Wallace, C&W's chief executive, wants to build up a global internet network capable of handling voice and data. But there are few companies Mr Wallace could buy to achieve the objective. As a result, Mr Wallace is coming under pressure from shareholders to return the cash in the form of share buybacks and increased dividends. One leading shareholder said: "I would like to see what C&W is going to do with its global businesses before it starts giving money back." news.independent.co.uk

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