Telecoms giant Cable & Wireless (C& W) has acquired 29.9 per cent of shares in smaller rival Thus for £329m (180p per share), and offered to buy out the rest of the company at the same price.

C&W made a preliminary approach to buy Thus, which owns the Demon broadband internet service provider, in May this year but needed to increase its offer from 165p to 180p per share.

Thus provides fixed voice and data, broadband, mobile and hosting services to an undisclosed number of UK businesses. C&W is expected to use Thus' 10,500km fibre optic network and other assets to supplement its own corporate telecoms portfolio and help it compete with BT for business customers.

Thus employs about 1,700 staff and delivered operating profit of £4m for the year ended March 2008 – compared with an operating loss of £11.1m a year previously – with revenue reaching £576m.

Thus rebranded from Scottish Power Telecommunications in 1999 and demerged from parent company ScottishPower in 2002.