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

To: Robert Scott who wrote (882)	5/14/1999 1:10:00 PM
From: Teddy	Read Replies (3) \| Respond to of 15615

hmmm, from The Wall Street Urinal: Dow Jones Newswires -- May 14, 1999 CNBC's FABER REPORT: Global Crossing, U S West Said In Talks The following report was aired Friday on CNBC-TV by CNBC reporter David Faber: "Global Crossing is deep into talks to purchase Baby Bell U S West for as much as $35 billion in stock, but it has hit a last-minute snag that could derail any deal. People close to the talks tell me the two companies had hoped to announce a merger agreement by early next week, but talks have cooled for now as Global Crossing deals with its current acquisition partner, Frontier Corp. There is no assurance that a deal will take place. The deal under discussion would not pay a large premium above U S West's current stock price, which has moved up by 10% this week on takeover speculation. The deal under discussion is a complex one, involving the issue of two classes of stock and the establishment of co-CEO titles for Global Crossing's Robert Annunziata and U S West's Solomon Trujillo. The plan is a merger of equals that will create a new company equally owned by shareholders of Global Crossing, Frontier and U S West. For purposes of the transaction, Global Crossing will be the buyer, said people familiar with the deal. Its shareholders will receive one share for each of their own in the new company, while paying a bit more than one share of Global Crossing for each U S West share. That will make it an even 50/50 ownership split when the new company is created. Company officials were either unavailable or declined to comment. Global Crossing is a company that has seemingly come from nowhere to become larger in market value than the Baby Bell it is seeking to merge with. Its $12 billion acquisition of long-distance provider Frontier is still pending, and sources tell me that may be the current stumbling block in any deal. While unclear at this time, Frontier may have certain rights to withdraw from its transaction or block another deal if Global Crossing pursues an acquisition of more than $2.5 billion. But while any deal with U S West would clearly breach that mark, the deal is likely to be characterized as a merger of equals and not an acquisition. Nonetheless, the speculation I'm hearing is that Global Crossing wants to stay on good terms with Frontier before doing any deal with U S West. The Frontier deal is expected to close next fall. Its value has skyrocketed as Global Crossing's stock price has hit new highs of late. It is that stock price - and its use - that may have motivated Global Crossing's founding investor, Gary Winnick, to pursue a deal with U S West. Winnick, the former Drexel Burnham partner of Michael Milken, is said by those who know him to be intent on creating a telecom giant. While a combination of U S West and Global Crossing appears to raise certain regulatory concerns with regard to the long distance rights of a Baby Bell, it would create a company that would own wires that connect U S West customers to spots all over the globe. That is when Global Crossing completes its plans to build 71,000 miles of fiber and joins the 20,000 miles of cable laid by Frontier. U S West has been actively upgrading its lines to a digital system, and together with the broadband that Global Crossing controls, the combination is thought by those creating it to be a rival to the likes of MCI WorldCom. The merger plan that was under discussion until the talks hit a snag would have involved Global Crossing buying U S West for stock and then splitting the combined company's operations into high-growth assets such as long distance, wireless, data transmission and fiber and the slower growth local phone properties of U S West and Frontier. Details of the plan beyond that could not be determined at this time, but is intended to satisfy Global Crossing shareholders who might not want the high growth multiple accorded their stock to be contaminated by the lower multiple awarded U S West."