Cable & Wireless to Buy Digital Island

Britain’s Cable & Wireless, owner of the third-largest network for Internet service providers, agreed to buy Digital Island Inc. for $291 million in cash to manage Web sites for more multinational customers. Cable & Wireless said it will pay $3.40 for each Digital Island share, or 8.6% above Digital Island’s closing price Friday. It also will assume $49 million in debt.

The London-based company has been expanding into Web-site management to offset declining prices for carrying data and voice traffic in Japan and the U.S. Digital Island, which speeds Internet transmission of audio and video, will become a unit of Cable & Wireless, keeping its San Francisco headquarters and management.