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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: oilbabe who wrote (1186)	6/16/1999 8:29:00 AM
From: jerryriti	Respond to of 15615

From the WSJ Interactive Edition: June 16, 1999 Global Crossing Doesn't Plan To Raise Bids for Two Firms By STEPHANIE N. MEHTA Staff Reporter of THE WALL STREET JOURNAL Global Crossing Ltd., an undersea cable operator, doesn't plan to immediately raise its bids for U S West Inc. and Frontier Corp., according to people close to the company. Global Crossing's offers to buy the two telephone companies have been challenged by Qwest Communications International Inc., a Denver-based long-distance company that on Sunday made unsolicited bids to acquire both. But in the wake of Qwest's stock slide Monday, Global Crossing executives believe their current offers for Frontier and U S West ultimately will prevail, people close to the company said Tuesday. In Nasdaq Stock Market trading Tuesday, Qwest shares rebounded slightly, rising 75 cents to close at $34.875; Global Crossing fell $2.0625 to $48.3125. For Frontier, a long-distance and local carrier based in Rochester, N.Y., Qwest is offering $20 in cash plus as many as 1.226 shares of Qwest stock for each share of Frontier -- about $62.75 a share. That compares with Global Crossing's offer of $63 for each Frontier share. Qwest's offer of as many as 1.783 shares of Qwest for each share of U S West works out to about $62.18 a share, based on Tuesday's close. This is roughly on par with Global Crossing's offer of about 1.28 shares of Global Crossing stock for each share of U S West, or about $61.84 a share. (The exchange ratio for the Global Crossing offer floats daily based on how many shares it would have to issue to complete the Frontier deal.) But some analysts believe Global Crossing has reason to be confident. It has definitive merger agreements with both U S West and Frontier. This means any rival would have to make a clearly superior offer for the Frontier and U S West boards to break their contracts with Global Crossing. If the offers remain as close as they are now, Global Crossing likely would win. In the case of Global Crossing's "merger of equals" with U S West, the U S West board may consider other factors, such as regulatory issues, in determining whether Qwest's bid is truly superior. In New York Stock Exchange composite trading Tuesday, U S West fell $1.875 to close at $56.125; Frontier rose 25 cents to $57.625. Jack Grubman, a telecommunications analyst with Salomon Smith Barney, issued a report Tuesday saying that Qwest shares would have to rise to $36 to "break even" with the Global Crossing offer for U S West. "Given Global Crossing's superior bid based on [Monday's] closing prices, we do not believe Global Crossing will increase its bid for either Frontier or U S West," noted Mr. Grubman in the report. Salomon Smith Barney advised Global Crossing on its proposed deals with U S West and Frontier. Some observers have speculated that Qwest and Global Crossing may split the spoils, with Frontier going to Global Crossing and Qwest grabbing U S West. Indeed, the market seemed to like Global Crossing's intent to buy Frontier, a move that helps the international cable company fill out its U.S. capabilities. In addition, people close to the Global Crossing deal said the company has been approached by several major telecom companies that would be interested in participating in both the U S West and Frontier transactions or in taking a position in Global Crossing. But Qwest is holding its ground -- for both companies. "Qwest has no plans to change its offer at this time," a company spokesman said. "There are a lot of variables to consider -- not only the price of the stock but also that we have a very strong base company."