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To: Ruffian who wrote (37346)	7/28/1999 11:46:00 PM
From: Michael	Read Replies (2) \| Respond to of 152472

Deutsche Telekom May Bid for Sprint, But France Telekom Still Holds Stake By NICOLE HARRIS, REBECCA BLUMENSTEIN and ANITA RAGHAVAN Staff Reporters of THE WALL STREET JOURNAL interactive.wsj.com NEW YORK -- The fate of Sprint Corp., the nation's third-largest long-distance company, is coming into question amid a wave of consolidation in the telecommunications industry. While other telecommunications players, most recently Qwest Communications International Inc. and U S West Inc., have agreed to merge, Sprint, with a current market value of about $75 billion, including its fast-growing PCS wireless unit, has remained on the sidelines. But at least one major potential suitor is now exploring the possibility of acquiring the Kansas City, Mo., company, according to people close to the situation. The most likely bidder is Germany's Deutsche Telekom AG, according to these people. The company is a partner in Global One, the embattled joint venture with Sprint and France Telecom SA. As part of that venture, each foreign company owns a 10% stake in Sprint. People close to the situation said that Deutsche Telekom is in talks to acquire France Telecom's stake as a first step in a possible outright purchase of Sprint, although a deal isn't imminent. Sprint officials declined to comment. Until now, possible suitors included BellSouth Corp., the conservative-minded regional Bell operating company, though people close to the company said Wednesday that such a move is very unlikely. BellSouth already owns a 10% stake in Qwest, holdings that would greatly complicate such a bid. The Qwest stake alone could be a springboard for BellSouth, should the company be allowed to enter the long-distance business. Any deal with Sprint may be fraught with difficulties because of the complex structure of Global One. -------------------------------------------------------------------------------- Two Sides to Sprint Sprint, the last remaining independent long-distance telephone company in the U.S., may be attractive to suitors. Here's a look: Sprint PCS* Sprint FON* 1998 revenue $1.23 billion $16.02 billion 1998 net loss $1.85 billion $1.54 billion Employees 12,000 52,900 Business Sprint's nationwide wireless telecommunications service with nearly four million customers in over 4,000 cities and communities across the U.S. Local and long-distance telecommunications services; stakes in Global One and Earthlink; other properties. *Figures are pro forma; PCS group net income excludes a $179 million charge; FON group includes a one-time gain of $104 million. Source: The company -------------------------------------------------------------------------------- Executives in the Sprint camp continue to insist the company isn't for sale. But William T. Esrey, chairman and chief executive officer, seemed to signal a slight opening in a recent CNBC interview. "We have all the capability we need to compete successfully going forward. So we're very comfortable where we are ... but we're always willing to listen if there's a better way to succeed in the business," he said. A Sprint spokesman said Mr. Esrey hasn't changed his tune. "He has always said that he would entertain the right offer if it could create more shareholder value than what Sprint could create on its own." A Deutsche Telekom spokesman couldn't be reached. Most of the talks with Deutsche Telekom revolve around the unprofitable Global One venture, according to the people close to the situation. Established in 1996, Global One was expected to provide phone service to big business customers throughout the world. But the venture has stumbled, and relations between the Germans and the French deteriorated following Deutsche Telekom's failed bid for Telecom Italia SpA this year. France Telecom, however, is a wild card. Bruno Janet, a spokesman for the company, said: "We are very satisfied with our investment in Sprint, and the 10% is not for sale." Analysts cautioned that any talks with Deutsche Telekom could be derailed by France Telecom's continued resentment toward the German company. Moreover, Sprint itself would have to approve such a move because the partners are unable to change any value of their stake until 2001. In New York Stock Exchange composite trading Wednesday, Sprint shares rose 75 cents to $51.25. --Kevin J. Delaney contributed to this article.