Tata Group, the Indian conglomerate which three years ago bought Jaguar Land Rover and steelmaker Corus, may be preparing to swoop on a third UK-based business.

Tata Communications, the group’s telecoms affiliate, said in a statement that it may make a cash offer for Cable & Wireless Worldwide and may decide on a transaction by the end of the month.

Shares in Tata Communications rose by 4 per cent and stock in CW&W, a troubled international telecoms provider with a market cap of £900m, by 25 per cent.

Bloomberg said Tata Communications cautioned that the talks were “at a very preliminary stage” and were part of the company’s review of acquisition opportunities. Reuters reported that Tata Communications had hired Standard Chartered Bank as adviser.

CW&W shares have leapt ahead this month after Vodafone, the British telecoms group, confirmed it was in talks on a possible bid. The report breathed life into a stock that had been hit by repeated setbacks since it demerged from the main Cable & Wireless group, a company with 19th century roots, in 2010.

After falling from around 93p at the time of the demerger to a low of 14p in November, the shares have soared this year. They were trading at 32.9p early in London on Thursday, up 18 per cent, after giving up some earlier gains.

Tata Communications is based on the VSNL, the former Indian state long-distance telecommunications company, which Tata Group acquired through privatisation.

Tata is no stranger to the challenges of foreign acquisitions. In 2007, Tata Steel bought Corus, the Anglo-Dutch steel group, for £13.1bn and in 2008 Tata Motors acquired Jaguar Land Rover, then a Ford Motor subsidiary, for $2.3bn. With the onset of the global economic crisis, both businesses ran into operational difficulties. Jaguar Land Rover has since come good for Tata, with emerging markets powering sales growth. But Corus, which was a much bigger acquisition and accounts for around two-thirds of Tata Steel’s sales, has been making losses, due to the weakness of the European steel market.

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