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Technology Stocks : USW US West: New Things Happening Over the Airwaves -- Ignore unavailable to you. Want to Upgrade?

To: Cleve Noyes who wrote (87)	5/14/1999 2:23:00 PM
From: Cleve Noyes	Read Replies (2) \| Respond to of 161

More of same (Associated Press): Friday May 14, 1:43 pm Eastern Time Global Crossing May Buy U S West By NOELLE KNOX AP Business Writer NEW YORK (AP) -- The Baby Bell phone company U S West Inc. is in talks to be acquired by Global Crossing Ltd., a telecommunications upstart run by a former AT&T (NYSE:T - news) executive, a person familiar with the situation said Friday. U S West, a Denver-based provider of phone service in 14 western and midwestern states, declined to comment. Global Crossing, which is building a worldwide fiber optic network and recently agreed to buy a phone company named Frontier Corp. (NYSE:FRO - news), did not return calls seeking comment. Earlier this year, the Bermuda-based company lured Robert Annunziata away from AT&T to be its chief executive. The $11.2 billion Frontier deal may present a regulatory obstacle to a merger between Global Crossing and U S West. In addition to providing local service in 32 states, Frontier is one of the nation's 10 biggest long-distance companies. As a provider of local phone service, U S West is forbidden from owning more than 10 percent of a long-distance company. With the addition of Frontier, Global's fiber network would connect 159 cities in the United States, Japan, Europe and Latin America. The Bermuda-based company is also planning undersea networks to link up four continents. U S West is the nation's biggest provider of high-speed Internet access over digital subscriber lines, or DSL, a fledgling service that works over regular telephone wires. DSL is considered the most worthy rival to the cable television wires that AT&T is using to build a multimedia network for TV, phone and Internet service. Last month, AT&T agreed to acquire MediaOne Group, the nation's fourth largest cable company and formerly a sister company of U S West. That deal included an alliance with Comcast (Nasdaq:CMCSK - news), the No. 3 cable company. Along with AT&T's pending alliance with Time Warner and its recent purchase of Tele-Communications Inc. (Nasdaq:TCOMP - news), AT&T will have access to the four largest cable systems in the nation. In afternoon trading on the New York Stock Exchange, U S West shares were up 50 cents at $60.50 while Global Crossing's Nasdaq-listed shares were down 37 1/2 cents at $59.62 1/2. ^------ AP Business Writer Bruce Meyerson contributed to this report.

To: Cleve Noyes who wrote (87)	5/17/1999 8:38:00 AM
From: E Golden	Respond to of 161

<Also, the purchase of US West might not be able to be accounted for as a pooling of interest, meaning the merger would be taxable, said Rex Mitchell of NationsBanc Montgomery Securities. That could put off large US West shareholders.> Can anyone explain this? Thanks, E.Golden

To: Cleve Noyes who wrote (87)	5/17/1999 8:56:00 AM
From: Beltropolis Boy	Respond to of 161

thanks, cleve. perhaps the most intriguing news to come out of USW in some time. here's more via today's ny times: "U S West shareholders are expected to receive about 1.2 shares of each of the separately traded stocks for every U S West share they own. Global Crossing shareholders will get one share in each of the separate stocks for every share they own. Investors can then choose how much of each stock they want to own." ----- May 17, 1999 U S West Expected to Merge With Global Crossing By LAURA M. HOLSON Global Crossing Ltd., the telecommunications upstart that went public only last year, is expected to announce Monday that it is merging with U S West Inc., the smallest of the regional Bell phone companies, in a stock swap valued at about $37 billion, people close to the talks said Sunday. The merger would bring Global Crossing, a 2-year-old company with headquarters in Bermuda, one step closer to taking on AT&T Corp. and MCI Worldcom in its bid to build a global fiber-optic telecommunications network. A combination with U S West, which has been largely left behind in the recent telecommunications merger boom, would give Global Crossing a presence in the United States as well as a platform from which to expand into Europe, Asia and Latin America. Any combination of the two, which was expected to be announced this week, is bound to be complicated. Global Crossing has yet to complete its $10.8 billion acquisition of Frontier Corp., the No. 5 long-distance company, which was announced two months ago. More important, the Telecommunications Act of 1996 bars the Bells from offering long-distance service within their operating territory until they convince the Federal Communications Commission that they have opened local phone networks to rivals. The Global Crossing-U S West deal is not expected to be completed for more than a year. That could give the Bell companies plenty of time to open their regions to competition, though there is no guarantee that will happen. "There is a lot of history of the Bell companies promising things and not delivering," said Richard Klugman, an analyst at Donaldson, Lufkin & Jenrette. Any overlap of Frontier's current business in U S West's territory could be divested to satisfy regulators, or Global Crossing could seek a waiver. Under the terms being proposed, the two companies will combine in a merger of equals, but for accounting purposes U S West, which is based in Denver, will technically be the acquirer. The new company, to be named Global Crossing Corp., would be incorporated in Delaware and have its headquarters in New York. It would be equally owned by shareholders of Global Crossing-Frontier on one side and U S West on the other. U S West's board approved the deal Sunday afternoon. Global Crossing's board met Sunday night and was expected to approve the deal. Frontier's board also met late Sunday. As with any deal, talks could still fall apart. The new Global Crossing will be made up of two separately traded stocks: one for Frontier's and U S West's traditional telephone assets, and the other for the combined companies' fast-growing data and Internet properties. A chief operating officer will be named for each of those businesses. Upon announcement of the merger, U S West is expected to begin a tender offer for about 9.5 percent of Global Crossing's stock at a price of about $62.50, people close to the talks said. When the deal is closed, U S West shareholders are expected to receive about 1.2 shares of each of the separately traded stocks for every U S West share they own. Global Crossing shareholders will get one share in each of the separate stocks for every share they own. Investors can then choose how much of each stock they want to own. Global Crossing's shares closed at $61.375 on Friday, while U S West closed at $62.25. In addition to any regulatory issues the two companies will have to overcome, the companies will have to sort through management issues. Global Crossing went public last year in a $399 million initial stock offering. It is backed by its founder, the financier Gary Winnick, who is the main architect of Global Crossing's strategy. He is a former associate of the junk-bond financier Michael Milken. But along with Winnick, Global Crossing has an executive suite already packed with high-powered executives. Global Crossing's chief executive is Robert Annunziata, the former founder of Teleport Communications Group, a company acquired by AT&T last year for about $12 billion. Annunziata worked briefly at AT&T before joining Global Crossing and has said that he was willing to quit AT&T only if he could run a company again. But in the combined company, he will have to share the chief-executive spot with Solomon Trujillo, chairman and chief executive of U S West. They will be advised by a board of 22 directors, 10 from U S West and 10 from Global Crossing-Frontier, with two to be added later. Global Crossing was advised by Salomon Smith Barney and Chase Manhattan Bank. U S West was advised by Merrill Lynch. Frontier was advised by Morgan Stanley Dean Witter. nytimes.com