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Vodafone's blockbuster £1bn bid for CWW still on after securing key support

Vodafone's £1 billion takeover of struggling telecoms firm Cable & Wireless Worldwide (CWW) appears to have been dramatically revived, after a key shareholder of the target UK-based company - which specialises in large corporate and government contracts - altered its initial stance and today agreed to back the 38p a share arrangement.

Canadian company Orbis, who is CWW's largest investor with a 19 per cent overall stake, had previously refused to throw its weight behind the proposed deal, with reports indicating it felt the offer undervalued the group.

Initial counts based on Orbis' objection to the agreement showed that support would fall under the 75 per cent of shareholder votes needed to finalise the proposed acquisition, though now the company is admitting that its "opposition would only serve to prolong the process."

Despite experiencing a share price collapse since parting ways with its Caribbean arm in 2010, CWW is still of great strategic importance in the UK due to its market share and infastructure.

A move would significantly bolster Vodafone's corporate portfolio - CWW's clients include supermarket giant Tesco - at a time when consumer growth is thought to be stagnating, with the blue-chip carrier also acquiring some 12,700 miles of fibre-optic network.

In fact, if a deal is pushed through, Vodafone would become the UK's second largest telecoms firm, behind only BT. It is widely thought that sizable staff lay-offs and office closures will result from a buy out, due to areas where the two firms presently overlap.

If the deal is completed, it is rumoured that Vodafone may look to palm off CWW's other principle asset - its 260,000 miles of underseas cables - to US firms like AT&T and Verizon, with figures in the region of £500 million being speculatively floated.

Indian telecoms company Tata Communcations was also rumoured to interested in acquiring CWW, but walked away from the negotiations, leaving Vodafone as the only active interested party.