Shares jump in Thus after C&W confirms bid

Shares in telecommunications group, Thus, jumped 12% yesterday after international telecommunications company, Cable & Wireless (C&W), confirmed it had made a bid approach.

C&W is keen to eradicate competition in the UK where its business has struggled to make a profit.

C&W chairman, Richard Lapthorne, approached Thus chief executive Bill Allen this week with an offer.

Traders believe it was pitched at about 150p a share which values Thus at approximately £275 million - a small fraction of the £4.5 billion valuation the company reached during the dotcom boom.

In a statement that acknowledged the Cable & Wireless approach, Thus said it was confident in its future as an independent group.

The company said 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.

It added that there could be no assurance that any offer would be forthcoming and urged shareholders to take no action.

Thus has a workforce of 1,700 people and started as Scottish Telecom in 1994, a branch of the privatised energy company, Scottish Power.

In 2002, Thus was de-merged from Scottish Power in a deal which effectively wiped out the majority of the company’s debts.

C&W has £243 million of cash and is in discussions to sell its £2 billion pension fund. A combination of Thus and the pensions-free C&W could pave the way for a break-up of C&W into its loss-making UK arm and its cash-generative international business.

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