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One2One may be IPO
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July 14, 1999: 7:46 a.m. ET
Report: Offering more likely after final bidders withdraw from cellular auction
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LONDON (CNNfn) - U.K. cellular phone operator One2One could offer shares to the public after the last two bidders for the company pulled out, according to a press report Wednesday.
France Telecom (PFTE) and Germany's Mannesmann (FMMN) have withdrawn from the auction, leaving One2One's owners -- Cable & Wireless (CW.) and MediaOne (UMG) - facing the option of a an IPO, the Financial Times reported.
The newspaper stated that all five leading bidders -- the others were Deutsche Telekom (FDTE), Telecom Italia, Vivendi (PEX) -- have now withdrawn from the bidding process.
But the paper reports that people involved in the negotiations insist one serious bidder remains.
One2One was expected to fetch around 11 billion pounds ($17.4 billion) initially, but at least two of the interested parties were not keen on paying more than 8 billion pounds, the FT reported.
"We have dropped out," a Mannesmann spokesman told Reuters. "The U.K. market is very attractive for Mannesmann and we have always said we were interested in it, but not for any price."
France Telecom could not be contacted for comment Wednesday.
"Eight billion pounds was the original valuation most of us came up with," said one London-based telecom analyst who spoke on condition of anonymity. He pointed out that even that figure could now be in danger however, given the failed auction process.
That has led the bankers advising One2One's owners to actively consider an IPO in the hope of recouping more cash.
"The situation still looks fluid," commented analyst Tressan MacCarthy of Credit Lyonnais Securities. She warned that "normally you'd get a very good response [to an IPO for One2One], because cellular is where the growth is. But in these circumstances it's very hard on the sentiment side."
One2One has just over 2.5 million subscribers, making it the smallest of Britain's four cellular network operators.
MediaOne is in the process of being acquired by AT&T (T).
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