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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Peppe who wrote (6965)	10/13/1998 10:03:00 PM
From: pat mudge	Respond to of 18016

Welcome comments on how this merger would affect NN. WEDNESDAY OCTOBER 14 1998 Americas BC TELECOM: Telus merger talk lifts shares By Scott Morrison in Toronto Shares of BC Telecom and Telus, Canada's second and third largest telephone service providers, continued to rise yesterday amid mounting speculation that the two groups would soon announce a C$9.7bn (US$6.3bn) merger. BC Telecom, shares of which are up almost 17 per cent since Thursday, confirmed yesterday it was in talks with respect to strategic initiatives to further the company's objectives. While it did not single out Telus, which has risen 7 per cent during the same period, industry analysts confirmed discussions between the two. A merger would double the market size of Telus and entrench it as the second largest telecommunications group in Canada. In 1997, the two companies had combined revenues of C$4.8bn, with 5.1m customers, including 800,000 cellular subscribers. But the entity would still lag far behind BCE, which had 1997 revenues of C$33bn, in part from serving 10.6m customers in Ontario and Quebec. With BC Telecom's market capitalisation at C$5.1bn and Telus at C$4.6bn, an agreement would essentially be a merger of equals. Analysts said it was likely that a combination would be accounted for as a pooling of interests with no goodwill write-offs. A merger between BC Telecom, the British Columbia carrier 51 per cent-owned by GTE, and Telus, which serves Alberta, would create significant cost-cutting synergies. But a combined company would still lack the national network and high-speed data transmission capability through which it could sustain growth. Observers said combined resources would enable the new group to make necessary investments or acquire a third company that could provide it with additional capabilities. The conventional wisdom is that the combined regional carrier would launch a bid for AT&T Canada in order to acquire a national network. AT&T Canada, estimated to be worth C$1bn, is 25 per cent-owned by AT&T, the US long-distance carrier, with the remainder controlled by three of Canada's largest banks. It was not clear how a merger would affect GTE's majority interest in BC Telecom. GTE is the only foreign company to hold a majority interest in a Canadian facilities-based carrier. A government official said GTE was entitled under a "grandfather" clause to maintain its interests within its territory of operation. Observers, however, question whether regulators would allow GTE to assume a majority interest of an expanded telecoms company.