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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: JDN who wrote (2606)10/13/1999 10:20:00 AM
From: M. Frank Greiffenstein  Read Replies (2) of 15615
 
Excerpt from TheStreetcom....

Here is Jim Seymour's take on the GBLX-Racal deal:

While all the talk stateside is about whether Global
Crossing (GBLX:Nasdaq) is in play or not, Annunziata's
Army just made a smart acquisition itself, in Britain.

By buying the telecom business of Racal Electronics
(RCALY:Nasdaq ADR) for about $1.65 billion -- in an all-cash
deal -- Global Crossing bought a great land-side extension of
its undersea business to the U.K. for what I think will be
seen in a year or two as one hell of a bargain.

Global outbid Energis (ENGSY:Nasdaq ADR), in a
fast-closing deal not exactly characteristic of the more
reserved world of British dealmaking. Which may explain
why, in addition to the $350 million premium Global
reportedly paid over the Energis offer, Global won the
contest.

(There's some egg on the face for Energis in this; it's been
telling analysts and reporters that the deal was nearly done.
Don't miss the great heads-up a month ago from Nick
Watson, TSC's U.K. correspondent. Nick's prescience was
right on the button, when he said Racal would have a lot of
explaining to do on this deal. Just maybe a different kind of
explaining.)

Racal's high-speed telecom network is buried alongside the
tracks of British Rail. Sounds like the strategy of Qwest
(QWST:Nasdaq) -- which I am long -- and pipes right into the
heart of U.K. population centers and telco exchanges.

What it means: A great move for Global Crossing, ultimately
much less expensive than it looks today. This kind of deal is
essential to becoming the kind of world-scale player Global
CEO Bob Annunziata says he wants GBLX to be: Smart,
fast, effective dealmaker. Yet another good long, sez I.
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