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Strategies & Market Trends : WR's Momentum Trades -- Ignore unavailable to you. Want to Upgrade?

To: Wayne Rumball who wrote (7219)	11/11/1999 12:57:00 PM
From: Wayne Rumball	Read Replies (2) \| Respond to of 11130

WRDP LONDON, Nov 11 (Reuters) - British telecoms group Energis Plc, thwarted in a recent bid to expand domestically, unveiled a major addition to its European activities on Thursday. Energis said it was paying 352 million pounds ($571 million) for U.S. firm WorldPort Communications Inc's (OTC BB:WRDP.OB - news) Dutch unit EnerTel in a move that would give it access to corporate customers across Europe. The deal came a month after Energis lost out in its bid to buy British Racal Electronics Plc's (quote from Yahoo! UK & Ireland: RCAL.L) telecoms arm. ''This is the next logical step in developing our position in Europe,'' Energis chief executive Mike Grabiner told Reuters. "What we need increasingly are corporate channels and access to customers and that is how EnerTel fits in. It gives us precisely that, a critical mass of corporate channels. ''We can build out of the Netherlands. Geographical boundaries are not terribly important, it is pan-European.'' The acquisition, which includes 19 million pounds debt, will largely be paid for by a placement of 14.7 million shares via Dresdner Kleinwort Benson. The pricing is expected on Friday. Separately, Energis said its results for the six months to September, due on November 23, would show continued strong growth and ''in particular, revenues, EBITDA and new business gains have been in line with plan.'' At 1030 GMT Energis's share price was up 3.8 percent at 22.30 pounds, just shy of its 1999 high at 22.45 and 66 percent above the year's low at 13.40. ENERTEL TO RIDE PIGGYBACK ON UCS Grabiner said EnerTel would fit on top of Unisource Carrier Services, Energis's entry point into Europe when it paid out 60 million pounds in August. ''What UCS gave us was the framework, the network...channels to third parties -- it has got wholesale channels. What we put into it was what we have really got -- services. Then it is about getting access to the corporate market.'' EnerTel was expected to quickly begin making an operating contribution. ''It is already EBITDA positive which for a company at this stage of development is quite unusual,'' Grabiner said, adding EnerTel was a mirror image of Energis three years ago. ''So we think we know very well what needs to happen to drive it to the next stage of development.'' Grabiner shrugged off Energis's failed Racal bid. ''Our real focus of growth...our main growth opportunity, it has been clear for some time, has been into Europe.'' Energis paid for UCS with some of the proceeds of a 250 million pounds junk bond offering in June. Grabiner ruled out a near-term return to the debt markets but said: ''We will continue to expand by a combination of debt and equity, and keep relatively conservative ratios.'' EnerTel is the leading fixed line alternative operator in the Netherlands and had revenues of 28 million pounds for the nine months to September. Its sale has been approved by around 70 percent of WorldPort's shareholders. As part of the deal, Energis will also acquire two switches in London and New York. The European business telecoms market is forecast to grow to 110 billion pounds in 2003 from 90 billion pounds in 1997, with higher-margin, value-added advanced voice and data services forecast to more than double their share of the market to 35 percent from 16 percent. ($1 equals .6160 Pound)