Cable And Wireless Reopens Merger Talks With BT

Cable and Wireless has reopened merger talks with BT, it has emerged. This would create one of the world’s largest telecoms groups.

The discussions centre on proposals for C&W to acquire BT through a reverse takeover, in which C&W would issue new shares to acquire the much larger BT, instead of the other way round. This would avoid BT having to buy out the minority shareholders of Hong Kong Telecom, of which C&W owns 57.5%. C&W is also believed to be holding talks with AT&T, America’s largest long distance telephone company. AT&T, like BT, is attracted to C&W because of its presence in Asia.

If BT does merge with C&W, the group would have to sell Mercury, with AT&T being the most likely takeover candidate. Oftel has made it clear that it would welcome the sale of Mercury to a company such as AT&T, which has the financial might to make it a real competitor to BT.