Bankers eye C&W sunshine offshoot

BANKERS are taking a close look at Cable & Wireless's lucrative business in the sunny Caribbean amid rumours of a management buyout. Institutions looking to finance a deal have held talks with senior figures within the company. Robert Lerwill, the C&W finance director, is believed to have been approached.

Cable & Wireless sold its Hong Kong telecoms business two years ago as it piled into global business networks, data traffic and web hosting. Recent acquisitions have bolstered its presence in these areas.

'There have been a lot of rumours about an MBO. The Caribbean business is going to go, although probably not quite yet,' said one source. 'They dare not sell it at the moment.'

The old West Indian quasi-monopoly is the group's only profitable and growing operation at the moment. Sales rose 7% this year. C&W Global, the new business, is seeing a 10% fall in sales and a 70% slump in gross margins. Investment bank Bear Stearns said the Caribbean business is worth £2.5bn, or 100p a share.

Lerwill could not be reached yesterday. Cable & Wireless insisted: 'We are not proposing to sell the business.'