Cable & Wireless makes £322m bid for Thus

Cable & Wireless has made an approach to acquire communications provider Thus in a deal valued at £322m by the city.

Cable & Wireless has made an approach to acquire communications provider Thus in a deal valued at £322m by the city.

Mark James, analyst at stockbroker Collins Stewart, said that assuming a 30% premium on the current Thus share price would value Thus at £322m.

Thus provides networking for clients including National Express, Scottish Power, Kwik Fit and Standard Life over an MPLS network.

The purchase would increase the range of Cable and Wireless' own UK network and help it compete against IT and telecoms providers such as BT and Verizon, said Richard Mahony, practice leader of enterprise services at analyst Ovum.

"Businesses are still conservative about sourcing IT networking and telecoms from one supplier but this is gradually changing as trends such as globalisation effect businesses," said Mahony. "The deal would mean cheaper service costs for Thus' existing enterprise customers, although whether Cable and Wireless would want to retain Thus' smaller customers remains to be seen."

In an investor event in March, Cable & Wireless said it would expand outside the UK by serving clients who are entering into new markets such as India as a result of globalisation.

Aviva, Cable and Wireless' largest customer, and Royal Sun & Alliance use its managed network service to host IP contact centres, and deliver international IP voice and data networking connectivity.

Tesco has also announced a £100m networking contract with Cable & Wireless to create a single voice and data network connecting its sites across 14 countries.

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