[Rumors Again Make The Rounds That IXC Will Be Taken Over]
NEW YORK -(Dow Jones)- Rumors have resurfaced that IXC Communications Corp., which provides phone service to small- and medium-sized businesses, is very close to selling itself.
Business Week magazine reported in its March 15 issue that IXC (IIXC) may be sold "within weeks" for about $1.9 billion, Business Week cited Britain's Cable & Wireless PLC, Internet-service provider PSINet Inc. and Global Crossing Ltd., which builds undersea fiber-optic networks, as possible suitors. Business Week put the per-share value at around $53 a share.
IXC last month acknowledged that it was considering a sale as one way to boost its stock price. Mergers & Acquisitions Report, an industry publication, last month reported that IXC was shopping itself for $80 a share, or roughly $3 billion. Mergers & Acquisitions Report said an unidentified bidder offered $60 a share, or $2.1 billion. The publication cited AT&T Corp., MCI WorldCom Inc. and any number of international telecom companies as possible suitors.
IXC management is said to be frustrated that Wall Street hasn't valued IXC at highly as firms like Qwest Communications International Inc. or Level 3 Communications Inc. All three are buliding large fiber-optic networks.
Austin, Texas-based IXC reported a much narrower fiscal fourth-quarter loss than analysts had expected. Revenue advanced 3.5% to $169.8 million. The firm posted a net loss of $26.8 million, or $1.17 a share, for the quarter ended Dec. 31.
IXC in December activated a coast-to-coast data network it hopes will serve as a backbone for the next generation of the Internet. To develop the network, IXC worked closely with some of the universities that originally designed the Internet. The network will be divided into eight regions with a central traffic point.
Observers say new communications companies such as IXC have an advantage over incumbent telephone companies because they are building new networks, instead of investing heavily to update existing networks to handle increasing amounts of data, Internet and multimedia traffic.
IXC is juts one of the contenders in the race to build new national fiber-optic networks. Qwest, Level 3 and Williams Cos. are also building networks, and the established national players - AT&T, MCI WorldCom and Sprint Corp. - continue to invest billions to upgrade their systems. |
