Cable & Wireless: Report Of Business Spin-Off Premature

LONDON -(Dow Jones)- Telecommunications operator Cable & Wireless, Monday dampened talk of an impending selloff of its two business units to private equity or foreign rivals, saying such discussions were "premature".

Shares in Cable & Wireless opened up 5% on Monday following press reports that the company is considering breaking up the company.

At 0738 GMT the shares had eased slightly and were trading up 8.3 pence or 4.6% at 189.5 pence.

"We are entirely focused on building the value of our two individual businesses - UK and International," said a spokeswoman for Cable & Wireless.

The company added in a statement: "This is progressing well with the individual strategies of the businesses starting to have resonance with customers and shareholders alike."

The company added that it was still in early stages of developing both units and that there was still more work to do.

"As such, any discussion of spinning off our businesses is premature," said the company.

The shares were also boosted by an analyst report from Citigroup, which upgraded its target price to 240 pence, saying that ongoing restructuring at the company had the potential to drive shares beyond 300 pence over the next two years.

Citigroup added that a demerger of the company could also trigger an additional 142 pence per share in value.

Last year Cable & Wireless separated the company into two operating divisions, U.K. and International, in order to generate better efficiencies, operating with their own virtual profit and loss accounts.

Company Web site: http://www.cw.com

-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 30th April 2007