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EDITIONS
 Friday, 10 January, 2003, 18:18 GMT
Chairman boost for Cable & Wireless
 Wires around fibre optic cables
Shares in Cable & Wireless (C&W) climbed by more than 10% on Friday as investors greeted the appointment of a new chairman with enthusiasm.

C&W announced that Richard Lapthorne would replace outgoing chairman Sir Ralph Robins with immediate effect.

Richard Lapthorne
Mr Lapthorne was the former chairman of Amersham
Mr Lapthorne was previously chairman of healthcare firm Amersham and spent six years as finance director at aerospace group BAE Systems.

In November, C&W abandoned an attempt to appoint non-executive director David Nash as chairman after it met with shareholder disapproval.

Shareholders wanted to see an external appointment after the firm announced plans for a major restructuring of its global business.

In the City, shares in C&W closed up 9 pence at 57p.

Share slump

C&W is planning to withdraw from much of the domestic business market in the US and Continental Europe, while still providing a service for multinational companies.

He's reckoned to be one of the most outstanding financial directors of his generation

John Hatherly
M&G Asset Management
The company has also been hit hard by the slowdown in demand for telecoms services.

The company has issued four profit warnings in two years and the future of chief executive Graham Wallace has come under question.

C&W shares took a hammering in December when it emerged that the company had to secure 1.5bn ($2.4bn) to cover a tax liability from the sale of its stake in mobile operator One2One to Deutsche Telekom.

C&W shares lost 87% of their value last year, and in December the firm was relegated from the FTSE 100 index of leading UK shares.

Well received

Analysts applauded Mr Lapthorne's appointment.

"He's a very high-profile appointment and he's reckoned to be one of the most outstanding financial directors of his generation," said John Hatherly, head of global analysis at M&G Asset Management.

One analyst suggested Mr Lapthorne may soon be looking for a new chief executive.

"One can imagine his first task will indeed be to find a replacement for Graham Wallace," said Hilary Cook, director of investment strategy at Barclays Private Clients.

"The feeling is that [Wallace] probably does have to go because his strategy has been shown to be so flawed," she added.

C&W will pay Mr Lapthorne mostly in shares.

As part of the deal, he will have to buy one million shares at Friday's average price and hold them until he steps down as chairman.

C&W will give him a further one million shares when he has spent three years in the post.

See also:

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