GBLX(steal of the year at $25)...more good news.....
Global Crossing buying Racal arm
By William Lewis and Andrew Edgecliffe-Johnson in New
York
Global Crossing, the fast growing
US-based telecoms operator,
last night snatched UK business
telecoms group Racal Telecom
from Energis, a rival UK network
operator, with an offer believed to
be worth about £1bn.
Energis had been widely
expected to clinch the deal with a £750m-£800m cash
and shares offer. But last night people involved in the
negotiations said Global Crossing had been declared the
victor with its all-cash bid. Global Crossing and Racal,
which also owns industrial and defence electronics
businesses, declined to comment.
If the deal is completed, the transaction will bolster
Global Crossing's efforts to build a pan-European
network to service the data, voice and internet needs of
business customers.
Racal Telecom would take Global Crossing's European
network to about 17,000km, and enable it to become one
of a small band of carriers with real global reach. Only
two years old, but with a market capitalisation of $28.8bn
(£17.3bn), Global Crossing has burst onto the
international telecoms scene in recent months with a
string of ambitious deals in the US, Asia and Europe.
They include the $10bn acquisition of Frontier, a local
and long-distance telephone company, and the £550m
purchase in April of Cable & Wireless's undersea
cable-laying business.
Global Crossing's last-minute victory would come as a
blow to Energis's ambitions to build a UK telecoms
network to rival British Telecommunications.
Nevertheless, the price likely to be paid by Global
Crossing may surprise UK analysts, who had described
Energis's approach as generous.
Racal Telecom, which grew out of the former British Rail,
has laid cables along the UK's railway lines while
Energis has run cables along the electricity pylons of its
former parent, National Grid.
Racal Telecom has failed to match Energis's recent
growth rate. In the year to March, its sales advanced by
12 per cent to £177m, while Energis grew by 57 per cent
to record revenues of £263m.
Racal Telecom is seen by many analysts as having a
strong network but too few customers. It recently spent
£400m improving the network, however. It has laid more
than 7,000km of cables, reaching 2,000 UK towns. By
2001 it hopes to be within 5km of 70 per cent of UK
business customers.
Goldman Sachs is thought to be advising Global
Crossing and Merrill Lynch has been advising Racal.
Neither investment bank could be reached for comment.
Racal has 7,400 km fibre network, crisscrossing the UK, which delivers fixed and mobile voice, data, Internet and
intranet services to organisations mainly in the transport, government, retail and financial services sector. |
