C&W splashes out on Digital Island

The move for the business that helps speed data over the web will ease the growing pressure placed on C&W by its shareholders who want the company to give back some its $6bn cash pile.

Digital Island's stock market value was almost £7.1bn at the peak of the technology boom, with its Nasdaq listed shares trading at over $148. However, C&W snapped up the company today at a valuation of $3.40 per share.

Digital Island reported net losses of $1.33bn in the six months to end-March and its total purchase price of $340m includes some $49m of net debt.

C&W who axed 4,000 jobs in March is expected to release further restructuring plans on Wednesday when releasing its full-year pre-tax profit.

Last year C&W recorded a £1.12bn profit, this year it's expected to be in the region of £760m.