C&W make preliminary offer for rival Thus

May 29 2008 by Iain Laing, The Journal

TELECOMS group Cable & Wireless has revealed it made a takeover approach for rival Thus.

Shares in broadband provider Thus leapt 19% – giving the company a market value of around £240m – after news of C&W’s preliminary offer.

C&W said it “notes the recent movement in share price of Thus and confirms that it has made a preliminary approach to the board of Thus in relation to a possible offer”. But the group said there could be no certainty that a formal offer would be made. Thus – formerly part of Scottish Power until its stock market flotation in 1999 – owns Demon broadband and also counts large businesses and public sector bodies as clients.

It employs more than 1,700 people and last week posted its first operating profits for the year to the end of March, with a £4m surplus, compared to an £11.1m loss previously. Thus responded to C&W’s statement by saying it was “confident in its future as an independent group” and urged shareholders to take no action at this time.

It added: “The board remains focused on delivering maximum value for shareholders and will evaluate any proposal from any third party against the value that the company can deliver as an independent group. There can be no assurance that any offer for the company will be forthcoming.”