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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (68551)	10/2/1999 12:21:00 PM
From: Thomas M.	Read Replies (1) \| Respond to of 132070

Gimme Credit 47 W. Polk St., Chicago, Ill. 60605 SEPTEMBER 22 ~ In an outcome only an investment banker could love, recent rival bidders for AirTouch Communications, Bell Atlantic and Vodafone, have decided to form a joint venture including the U.S. wireless operations of both companies (and those of GTE when its merger with BEL is complete). Amid the usual applause and high-fiving that accompanies any M&A transaction, nobody but us seems puzzled by the fact that Vodafone completed its acquisition of AirTouch a mere three months ago and now is turning around and getting rid of most of the assets it purchased. And not only getting rid of them, but placing them under the control of the company it recently outbid for them. What happened to all the touted benefits of the Vodafone/AirTouch merger? Although baffled by the incongruity, we see little immediate credit quality impact on BEL. Yes, we can read. We understand the stated reason for this transaction is to put together a national wireless ''footprint'' to compete with (and, indeed, surpass) other big wireless companies. But couldn't this have been accomplished by BEL simply purchasing AirTouch to begin with, instead of paying a premium to Vodafone to control the very same assets a few months later? Surely that would have been a much cleaner, far less complex deal than this awkward joint-venture structure. There already is talk of a future spinoff or IPO of the wireless company, so we don't expect the joint venture to be immortal. This means investment bankers will again be enriched by shuffling around the same assets some years from now, a comforting thought. -CAROL LEVENSON