Cable & Wireless sells Australian subsidiary

Singapore Telecommunications has won a bidding battle to buy Cable & Wireless Optus, a subsidiary of Britain's Cable & Wireless and Australia's second biggest phone company.

SingTel beat Vodafone Pacific, a subsidiary of the British Vodafone Group, and one other contender for C&W Optus with a bid of up to 4.57 Australian dollars (£1.60) per share.

That values the company at as much as 17.2 billion Australian dollars (£6bn).

The takeover - expected to be completed in the next few months - would be one of the biggest corporate deals in Australian history and the largest overseas investment by a Singapore company.

Britain's Cable & Wireless has said it was selling Optus because the Australian company doesn't fit in with C&W's global expansion into data services.

Vodafone Pacific withdrew its bid over the weekend because it said a takeover wouldn't be in the best interest of its shareholders.

SingTel has been aggressively trying to expand in the Asia-Pacific region but was twice stung badly last year when it failed in high-profile bids to take over Hong Kong's Cable & Wireless HKT and Malaysia's Time dotCom.

The SingTel-Optus deal creates an Asia-Pacific phone company with revenues of almost £3.6bn for the year to March 31, 2000. The companies will have a combined market capitalisation of £17bn.