Vodafone Sends Cable & Wireless Soaring 28%

If Vodaphone decide to actually bid for CWW and all they offer is cash in a range of 30p-40p per share, I for one, would not accept for my own shareholding. At that sort of price, it would be an absolute steal and way below NAV. The prospects for CWW are looking much rosier now and, at the very least, the new Chief Executive should be given the opportunity to complete his brief to remedy past problems and produce the sort of profitability the Company seems capable of generating. The potential and technology is there so why go through all the pain and then sell out cheaply? It's nothing more than an opportunistic approach by Vodaphone which should be turned down out of hand as not being in the best interests of the shareholders and employees.

As I said in the past, CWW has spare data capacity and I suspect this is what is attractive to Vodafone.

It's a ready made International trunk route of high quality.

With data streaming becoming the future, this capacity should not be undervalued and I wouldn't be at all surprised to see some other players enter the bidding.

Glad I averaged down and look forward to developments, but 30p would be an insult and I would hope shareholders would reject that without a second thought.

Your analysis drfuzz is perfectly reasonable, however, you have to consider the potential for this company, not just it's present state.

With streaming becoming bigger by the day, available bandwidth (particularly across continents) will become a prized possession and I've no doubt, one will have to pay a premium to get it.

IMHO, that's where the value lays in CWW. The rest of it's business has been poorly managed (some would say, not managed at all) and although as confidence slowly builds, it's not going to suddenly explode into a high flyer, it can produce better profits than at present.

CWW has many significant physical assets. It also has high barriers to entry. Don't discount it too harshly.

I appreciate the comments and the optimism, after all I do hold the shares. But I just rechecked my analysis and quoting from my notes without re-interpreting following interims.... 624m of exceptionals at interim. 424m tangible NAV, 900m including intangibles. Expectations going forwards profit of 65-115m before tax and more importantly exceptionals (which might include more writedowns, of course)... 65m p.a. after tax. Fair value hard to judge but anywhere between 20 and 37p depending on if more bad news to come. I don't think one man is likley to turn CW around so drastically, so will adhere to my fair value and would be happy with between 30 and 40p.

You'll forgive me if I don't buy into a word that John Pluthero says. After all, this is the same guy who sat as chairman while the board rediverted shareholder funds into their pocket, then took the job of CEO with a lofty salary being branded as the saviour, only to leave 6 months later having managed to cut the share price by another 60%. That statement can mean just about anything you want it to, like "we are keeping old customers and getting new ones, but are margins are down / they're spending less cos they're using competitors services at the same time" etc etc. Those interims were horrible and out of the blue, you saw 600m of assets wiped off the balance sheet in the drop of a hat (about 40% of total balance sheet value at that point in time), and the fall in share price reflected that. CEOs coming into crisis companies tend to make sure they get all the remaining dirt out asap rather than make sure there's nothing left to come out... though based on the size of the interim writedowns, I agree with you that it would be surprising to see large writedowns... well, we will find out tomorrow.

All I can say is each to their own, but will also pose you a question? Are you buying at the current price (ca 27p)? If the answer is no then you might want to think carefully about what CW is worth - after all, if it really is above 40p in your opinion then surely you should be adding. For the record, following interims I decided not to top up at any price until after tomorrows results - and contingent on the fact that the circus is over... and even if it is, I will not be topping up at 27p....

drfuzz - Don't get me wrong, I'm not defending the record of the previous top management . That speaks for itself. What I'm more interested in is the situation here and now and whether CWW is at a turning point in terms of professional management making the Company's assets sweat and generate the sort of return shareholders should rightly expect. We shall all know very shortly whether any progress has been made in that direction, and if not, why not. So we should have an idea of the sort of defence CWW could mount if an offer in the range 30p-40p was forthcoming. The "surgery" at the time of the interims appeared to be very comprehensive and, as I said previously, I really would be very surprised to see any further large writedowns. I totally agree with you that words mean nothing if not backed up by action but I do get the impression, and it's only a gut feeling, that CWW is very slowly starting to regain its former poise. If that feeling proves baseless, then I suspect that CWW's days as an independent company may well be coming to an end in the not too distant future and shareholders will once again be on the receiving end of apparently poor past stewardship. As to your question about whether I have added to my shareholding recently, the answer is no. It's very rare for me to chase shares down particularly if it means selling something else to do so. In fact, the last time I did that was to buy Barclays at 57p to reduce my average cost price to about 110p. At 14p CWW looked like a great trading opportunity but at 27p it doesn't currently meet one of my personal long term investment criteria, namely, pay a dividend and it is still unclear when, or if, the dividend will be reinstated. However, at this juncture I'm happy to continue holding my original stake.