Broadband News
News, views and analysis
Thus deal looks almost certain for C&W
01 Sep 2008 | 21.59 Europe/London
Thus, owner of Demon Internet, looks set to finally be owned by Cable & Wireless.
Despite the board rejecting C&W’s offer of 165p per share, which was increased to 180p at the end of June, it has now virtually conceded defeat. The turnaround has been prompted by Thus not receiving comparable offers from a ‘white knight’ and reports are suggesting C&W claims to have a deal to buy enough shares to delist the company (so it would no longer be listed on the stock exchange).
Hence, the Thus board has issued a statement suggesting that shareholders consider the unenviable position of rejected C&W’s offer and finding themselves owning a small slice of another company.
“While the board remains confident in the standalone prospects of Thus, the board recognises there are risks of remaining as a minority shareholder in Thus in light of C&W's stated intention to de-list Thus shares upon the offer being declared unconditional.”
Thus shareholders have until September 9th to accept the offer and it is unlikely they will refuse. They can take solace, however, in the 180p per share carrying a 60% premium over the company’s share price when C&W revealed its interest. In fact, it was shareholders that forced the Thus board to carry on talking to C&W throughout the summer after the initial offer of 165p was rejected.
The purchase of Thus, and hence Demon, will see a return to consumer broadband for C&W which had a brief foray in the market through LLU operator Bulldog which received a bad reputation for customer service before being sold off to Tiscali in 2006.
Despite the potential concern this may cause Demon consumers, the City appears to be very much in favour of the deal with C&W shares rising each time the purchase looks likely to go ahead and previously dipping when Thus rejected initial advances.
Despite the board rejecting C&W’s offer of 165p per share, which was increased to 180p at the end of June, it has now virtually conceded defeat. The turnaround has been prompted by Thus not receiving comparable offers from a ‘white knight’ and reports are suggesting C&W claims to have a deal to buy enough shares to delist the company (so it would no longer be listed on the stock exchange).
Hence, the Thus board has issued a statement suggesting that shareholders consider the unenviable position of rejected C&W’s offer and finding themselves owning a small slice of another company.
“While the board remains confident in the standalone prospects of Thus, the board recognises there are risks of remaining as a minority shareholder in Thus in light of C&W's stated intention to de-list Thus shares upon the offer being declared unconditional.”
Thus shareholders have until September 9th to accept the offer and it is unlikely they will refuse. They can take solace, however, in the 180p per share carrying a 60% premium over the company’s share price when C&W revealed its interest. In fact, it was shareholders that forced the Thus board to carry on talking to C&W throughout the summer after the initial offer of 165p was rejected.
The purchase of Thus, and hence Demon, will see a return to consumer broadband for C&W which had a brief foray in the market through LLU operator Bulldog which received a bad reputation for customer service before being sold off to Tiscali in 2006.
Despite the potential concern this may cause Demon consumers, the City appears to be very much in favour of the deal with C&W shares rising each time the purchase looks likely to go ahead and previously dipping when Thus rejected initial advances.