C&W poised to exit from US

CABLE & Wireless's humiliating retreat from the world's biggest economy has moved a step closer. The telecoms group has wrapped up a two-day auction of its US web-hosting and internet assets, accepting an offer of more than $160m (£86m) in cash from Savvis Communications.

That agreement paves the way for C&W's exit from the US, reversing a £2bn expansion initiated by former chief executive Graham Wallace at the height of the dotcom boom.

Wallace ploughed an estimated £9bn into plans to make C&W the internet carrier of choice for the world's multinationals but the group never made a profit from its web-hosting operations.

The auction proceeds will go to creditors of the loss-making US operation, which is in Chapter 11 bankruptcy protection. C&W's lawyers were expected to detail the sale to a US bankruptcy judge today.

The competitive sale process was sparked last month when C&W agreed to sell the assets for $125m to Gores Technology, which invests in distressed telecoms set-ups.

That agreement was contingent on no higher offers emerging, prompting C&W to arrange the auction.

Savvis is the third-largest provider of data and voice networks to US companies. It is a unit of buyout firm Welsh, Carson, Anderson & Stowe.

The decision to quit the US was made by Francesco Caio, who took over as chief executive last April, and chairman Richard Lapthorne.

C&W's shares were one of the best performers in the FTSE 100 last year.