MCI Worldcom Says Has No Plans to Make Takeover Bid for AAPT
Bloomberg News
May 27, 1999, 6:29 a.m. ET
MCI Worldcom Says Has No Plans to Make Takeover Bid for AAPT
Sydney, May 27 (Bloomberg) -- MCI Worldcom Inc., the No. 2
U.S. long-distance company, said it doesn't plan to make a
takeover bid for Australia's No. 3 telecommunications carrier
AAPT Ltd., which is trying to fend off a hostile A$1.5 billion
bid from Cable & Wireless Optus Ltd.
''We are not in talks with AAPT. We are not making a bid for
AAPT,'' a MCI Worldcom Asia-Pacific spokeswoman said. ''We have
no plans to make a bid for AAPT. It's all been press
speculation.''
AAPT has tried to line up a suitor to make a higher takeover
bid since Optus offered A$5-per-share in April, and secured 10.6
percent of AAPT stock. Its plans were frustrated when Telecom
Corp. of New Zealand acquired a 9.9 percent stake in AAPT at
A$5.70 per share, effectively meaning it can block the bid. AAPT
shares fell 5 cents to A$5.68 today.
MCI Worldcom was seen as the most likely bidder for AAPT
because it could have wrapped AAPT into its existing investments
here, such as its recent acquisition of Australia's No. 2
Internet service provider OzEmail.
The exit of MCI Worldcom as a potential bidder likely means
Optus and Telecom will start talks aimed at co-operating in the
A$25 billion telecommunications market, which is dominated by
Telstra Corp.
''It now clears the way for a negotiated outcome between
Optus and Telecom,'' said Ian Martin, an analyst at ABN Amro
Australia Ltd. ''Telecom could pursue an Internet deal to use the
Optus Internet backbone in Australia and around the region.''
Telecom said it made the investment in AAPT to get a
strategic foothold in Australia, amid slowing growth and a
plummet in standard phone call prices as more carrier enter the
New Zealand market.
Telecom, though, may still trump the Optus bid. The New
Zealand Herald newspaper reported this week that Telecom is
arranging a NZ$2 billion debt funding facility in case it decides
to make a full bid for AAPT. Analysts have said Telecom could try
and boost its stake in AAPT to 50 percent, and snub an alliance
with Optus.
Optus is 53 percent owned by U.K.-based Cable & Wireless
Plc, which also owns 100 percent of Hong Kong Telecommunications
Ltd.
Australia's antitrust regulator, the Australian Competition
and Consumer Commission, is likely to announce next week if Optus
can acquire AAPT. Analysts expect Optus to get approval, though
it might be required to sell some of AAPT's assets.
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