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

To: Augustus Gloop who wrote (2552)	10/11/1999 12:57:00 PM
From: JDN	Read Replies (1) \| Respond to of 15615

Havent seen this press release posted. This is part of the reason GBLX excites me. I see they are considered a WCOM competitor now. Of all the talk about being acquired, I could live with a WCOM/GBLX marraige. JDN LONDON, Oct 11 (Reuters) - Global Crossing Ltd <GBLX.O> took a major step towards its goal of creating a worldwide telecom network by snatching Britain's Racal Telecom from under the nose of Energis Plc <EGS.L> for one billion pounds ($1.65 billion). The Bermuda-based group outwitted Britain's Energis at the 11th hour by offering 950 million pounds in cash and agreeing to assume debts worth 50 million pounds of the telecom arm of Racal Electronics Plc <RCAL.L>. The price was around 300 million pounds more than most expectations. Energis was not available for comment but industry sources said it offered up to 750 million pounds -- 500 million in shares, rest in cash -- before bowing to Global Crossing. Energis' shares, which had risen considerably in the last fortnight on hopes of a deal, fell in the morning to 17.20 pounds. They later recovered on the back of interest in the sector stemming from expectations of further consolidation and closed 24 pence up at 18.23 pounds Racal said it would return 500 million pounds to shareholders at 167 pence per share. Its shares gained 16 pence or around 3.5 percent to 471p. RACAL BREAKING UP The sale, expected to be completed next month, would leave Racal, which is in the process of being broken up, with its defence electronics, industrial electronics and transportation services. The transaction would trigger an exceptional profit of around 600 million pounds in 1999/2000. Racal said its performance in the current year had been hit by reorganisation costs in defence and industrial electronics divisions and sales and marketing costs at Racal Telecom. A Racal spokesman said it would remove all its debts -- 390 million pounds -- at the end of last year in one stroke. The purchase of Racal Telecom further boosts Global's ambitions to build an intercontinental fibre optic network to handle global communications traffic. It is currently building Pan European Crossing, connecting nine European countries with an 11,000 km fibre optic network. This deal now pits Global directly against British Telecom <BT.L>, MCI Worldcom Inc <WCOM.O>, Bell Atlantic Corp <BEL.N> and SBC Communications <SBC.N> in Europe where Britain, Germany, France and Italy are the key markets. Racal Telecom controls over 7,000 km (4,300 miles) of fibre optic cables crisscrossing almost the entire UK. ANALYSTS WELCOME DEAL It delivers fixed and mobile voice, data, Internet and Intranet services to organisations mainly in the transport, government, retail and financial services sector. Analysts welcomed the deal saying it would be complementary to Global's business, while for Energis it would have implied some duplication. "It (Global) is securing its business by getting something concrete rather than hope and hype which is what a lot of businesses have been built on so far," said John Tysoe, telecom analyst with WestLB Panmure. Global Crossing's vice chairman Thomas Casey told Reuters that the deal would boost its earnings marginally in 2000 and around double digits the following year. The business earned an operating profit of 22 million pounds on sales of 199 million in the year to March, 1999. On Friday, Global Crossing itself was the target of takeover speculation, with Germany's Deutsche Telekom <DTEG.DE> and regional 'phone company BellSouth Corp <BLS.N>. Although industry sources close to the company told Reuters it had not received any offers vice-chairman Casey said it would still be looking out for deals. Global Crossing was advised by Goldman Sachs, while Merrill Lynch advised Racal on the deal. 12:28 10-11-99