Cable & Wireless is fighting back against the market rumour mill. Tony Rice, its finance director, says chatter that bids are in offing for the UK telecoms group is plain “market mischief making” and “blatantly inaccurate”.
It is not often that a company comments so robustly on tittle-tattle. Usually executives try to rise above it.
Bid speculation can be a distraction for company management but it is not in executives’ interest to puncture rumours that are supporting the stock – especially in C&W’s case. The company has a lucrative management compensation scheme that offers bumper pay-outs tied to share price performance.
C&W shares are up, so perhaps there wasn’t much froth in the price anyway. However, Mr Rice threw investors a bone by admitting that buyers had expressed interest in some of the company’s assets but it had no interest in pursuing any disposals.
The comments come a couple of days after Yell, the directories group, said it had received no approaches. Yell has been the subject of speculation of a private equity bid since issuing a profit warning last month. Meanwhile, Invensys, the UK engineer, on Thursday said it had had no approaches either.
So there you have it. Investors have been warned.