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Telus CEO says still in acquisition hunt
CALGARY, April 30 (Reuters) - Undeterred by failure to acquire AT&T Canada Long Distance Services Co., the CEO of maverick Canadian telecommunications firm Telus Corp. (T.TO - news) said on Thursday the company is still in the hunt for a major merger or acquisition.
Telus Chief Executive George Petty said he was unaware of any company in the worldwide telecommunications industry that was not either in talks with potential partners or already in a deal. His firm would be no exception as it attempts to break out from Alberta's borders, he said.
''I know in my heart that Telus does need a partner -- we have our Stentor partners today -- but in my mind we need to make a move to help us focus better into those markets, work on new services and continue to reduce our costs,'' Petty told reporters after the annual meeting.
''I believe another alliance is inevitable and we're very hopeful that Telus would be a part of that.''
Edmonton-based Telus, the cash-rich firm that operates Alberta's telephone system, shook up Canada's telecommunications industry last month by revealing it was in talks about a ''combination'' with alternative long-distance provider AT&T Canada.
Before being scrapped two weeks ago, the negotiations sparked a tidal wave of speculation over other potential deals in the Canadian industry and revealed sharp rifts within Stentor, the alliance of Canadian provincial phone companies that is dominated by BCE Inc. (BCE.TO - news) unit Bell Canada.
One reason Stentor exists is to keep the provincial telcos from competing on each other's turf. Telus ownership in AT&T Canada -- which has a 10 percent share of Canada's overall long-distance market -- would have flown in the face of that arrangement.
Petty, a former executive with New York-based AT&T Corp.(T - news), a 33-percent owner of AT&T Canada, said it was clear the structure of the Stentor alliance has to change amid today's deregulation and rapidly advancing technology, but he would not offer his views on how.
He also declined to elaborate on the issues that sunk the C$1-billion-plus AT&T Canada deal at the 11th hour, other than to say issues emerged that would have been detrimental to Telus's shareholders. Rekindled negotiations between the parties were possible, but not likely, he said.
The company is still sitting on a C$264-million war chest and has a balance sheet that would allow the assumption of considerable debt.
Petty confirmed speculation that Telus had spoken to GTE Corp. (GTE - news) regarding the status of the U.S. firm's controlling stake in Canada's second-biggest phone company, British Columbia's BC Telecom Inc. (BCT.TO - news)
''We have, I believe, had discussions with almost everybody over the past two or three years, and certainly part of the discussions included talking to GTE, but there's certainly nothing current in that area,'' he said.
Regarding the timing of a transaction, Petty said he would be pleased if one was in the works within a year, ''but if it takes more than that to get the right deal that's the time we'll take.''
Meanwhile, the company late on Wednesday reported first-quarter net earnings of C$63.7 million or C$0.44 a share on revenues of C$659 million, up from earnings from continuing operations of C$41.7 million or C$29 a share on revenues of C$615 million in the same period last year.
The 1997 earnings excluded C$121.7 million or C$0.84 a share from British television and cable television assets that were sold last year.
Telus stock in Toronto was up C$1.45 to C$38.55 on Thursday. |
