Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: zbyslaw owczarczyk who wrote (11919)	6/18/1999 6:51:00 AM
From: Glenn McDougall	Respond to of 18016

WIC Western sheds unit and $1B lawsuit WIC Connexus sale to Maxlink puts end to Newbridge's suit Jill Vardy Financial Post OTTAWA - The new owners of WIC Western International Communications Ltd. shed their WIC Connexus unit and a $1-billion lawsuit yesterday by selling WIC Connexus to Maxlink Communications Group. MaxLink's purchase of WIC Connexus for $50-million brings to a halt a lawsuit filed by Newbridge Networks Corp. against WIC for breach of contract. The purchase price also buys MaxLink another, smaller company called Regional Vision Inc., which was partly owned by WIC. Both MaxLink and WIC Connexus have been racing to build a national network for local multipoint communications services (LMCS), a new type of wireless phone technology that sends phone and data signals over the airwaves at very high frequencies. Both companies had signed contracts with Newbridge and its partner, Alcatel Alsthom of France, to supply the LMCS equipment to build the networks. But last August WIC Connexus dumped Newbridge in favour of arch-rival Cisco Systems Inc. after WIC was bought by Shaw Communications Ltd., which uses Cisco equipment. That prompted the Newbridge lawsuit. Now that MaxLink owns WIC Connexus, Newbridge expects to become the key supplier of almost $1-billion-worth of new equipment over the next four years. "From our point of view this suit was never designed to obtain damages from WIC. We sued to enforce the contractual obligations we felt were owing to us. Now that WIC has been sold to Maxlink, and we have a purchase contract with Maxlink, we're satisfied we got what we were seeking," said Peter Nadeau, Newbridge's vice-president and general counsel. That doesn't mean MaxLink won't continue to deal with Cisco for router equipment for its Internet Protocol (IP) network, said Joel Bell, MaxLink's president. But it will make full use of its "extremely close relationship" with Newbridge. That relationship includes millions of vendor financing from Newbridge to pay for the new equipment on which MaxLink will establish a nationwide network of wireless broadband communication services. J.P. Morgan Bank Group has also arranged loans to finance the network and the purchase of WIC Connexus and Regional. It was never clear what Shaw and co-owner CanWest Global Communications planned to do with WIC Connexus, said Bob Beck, analyst at CIBC Wood Gundy in Toronto. After a prolonged battle for WIC last spring, Shaw ended up with a slim majority ownership and control of WIC's radio and specialty TV channel interests. CanWest got 46% and WIC's TV stations. But neither had agreed on who would get WIC Connexus. "The Connexus assets had always been left aside, so we always assumed they would be sold," Mr. Beck said. The $48.3-million of the purchase price that will go to WIC will probably be used to pay down debt, Mr. Beck said. The remainder will go to the other owners of Regional Vision.