Cable & Wireless, the UK-based corporate telecoms provider, has revealed it is interested in acquiring its smaller Scottish rival Thus.
Thus, which has a significant customer base in the public sector, grew out of the telecoms operations of Scottish Power. It is best known as the owner of Demon Internet, the ISP founded by Cliff Stanford that is credited with taking internet access to the mass market in the UK.
C&W revealed in a one line statement to investors that it had made a preliminary approach to the board of Thus.
"This announcement does not amount to a firm intention to make an offer and accordingly there can be no certainty that an offer will be made," the company added in the statement.
Thus is currently valued at around 250 million, with its shares up 25 per cent following C&W's announcement.
So far Thus has only responded in the form of a statement to investors.
In that statement, the company said: "Thus is confident in its future as an independent group, which offers an attractive combination of strong growth and future cash flow generation. The Board remains focused on delivering maximum value for shareholders and will evaluate any proposal from any third party against the value that the company can deliver as an independent group."
Cable & Wireless is the second biggest telecoms provider in the UK behind BT and was founded in the 1860s. It once tried to take on BT in the domestic telephony market when it launched Mercury Communications in 1981. Last week, the company revealed plans to split itself into two in the current financial year, having already separated its European, Asia and US businesses from its operations in the rest of the world in 2006.
Yesterday, C&W landed a 100 million telecoms contract from supermarket chain Tesco.
