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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (11817)	8/3/2001 2:40:53 PM
From: elmatador	Respond to of 12823

BT local loop bidder refuses to back down By Richard Baum and Sophy Tonder, Reuters 03 August 2001 Earthlease, a group offering eight billion pounds ($11.46 billion) for part of British Telecom's fixed-line network, discussed its offer with industry regulator Oftel on Thursday in a sign it believes it can still strike a deal, an industry source said. The consortium, headed by U.S. finance house Babcock & Brown, showed Oftel the documents it sent British Telecommunications Plc in May offering to buy the company's "local loop," the wires linking local exchanges to homes and offices, the source said. BT has dismissed the bid as absurd, according to one source close to the company, but another said it had not closed the door to further talks with Earthlease. Earthlease has said it hopes to resume discussions with BT. The meeting with Oftel was its first and could help it smooth the way to any potential deal. Neither party would confirm or deny the meeting, although the source indicated that it had taken place as planned. The consortium, which includes U.S. merchant bank Chancery Lane Capital, is offering to invest 500 million pounds a year for seven to 10 years to upgrade BT's network for broadband Internet services, according to a source who has seen its plans. The bid is backed by financing from JP Morgan Chase, Deutsche Bank and UBS Warburg. The group would lease access to the local loop to BT and other telecoms companies, making BT independent of the "last mile" of Britain's telecoms network. The offer would allow BT to further cut its debt and would accelerate competition over the local loop, which Oftel has been trying to encourage to speed up the roll-out of high-speed Internet services. Although BT has said a demerger of the local loop is not on its agenda, Earthlease is not backing down. One of its team, Heather Rabbatts, former chief executive of Lambeth Council, has been planning to make further contact with BT Chairman Sir Christopher Bland since news of the offer became public Sunday. Bland knows Rabbatts from the British Broadcasting Corp., where he is chairman and she is a board governor. In another sign that Earthlease has not abandoned the idea, the Chancery Lane person working on the deal, Ted Ammon, has flown from the United States to London to discuss the next move. One option is to give BT a cooling-off period while it deals with the demerger of its mobile telephones business, slated for late this year, before Earthlease makes a fresh approach. One of BT's top 10 shareholders told Reuters it would want the company to consider the offer if it got a good price. "The big problem is that nobody knows how much money that business makes, so nobody knows if eight billion pounds is good or bad," the shareholder said. BT does not split out figures for the local loop in its published accounts. An Oftel spokesman said the regulator would support anything that improved transparency in regulation, but would have little say in whether BT could sell its local loop. If BT agreed to a deal, Oftel would have to decide how it split regulation between BT and the buyer of the local loop, the spokesman said.