|
Telekom tweaks cable sale
|
 |
November 9, 1999: 7:58 a.m. ET
$10B cable network auction altered to include IPO of 40% holdings
|
LONDON (CNNfn) - Deutsche Telekom has made late changes to its auction of the world's biggest cable television network in an attempt to increase public interest in the business, the company announced Tuesday.
Telekom has told the bidders for the nine regional cable units that it will no longer sell all but a 25 percent stake in each network at one time. Instead, Telekom will auction only 35 percent of the holdings, giving the successful bidders management control of the companies.
A further 40 percent holding in each company will be turned into non-voting stock and offered on the stock market within two years. That would leave Telekom with its original intention of owning a 25 percent stake in the cable companies.
The move is designed to "create a broader investor base, and more public interest," according to a Telekom spokesman. He categorically denied that the decision to go for an IPO had been made because Telekom is unhappy with the prices it has been offered for the companies. "We are pleased at the proposals we have received," he commented.
Telekom refused to comment on what the bidders, whose identity has never been officially confirmed, think of the change in the sale process.
The bidders are currently going through the books of the companies as part of the due diligence process. The interested parties include Deutsche Bank with several other banks, existing cable operators, and Microsoft (MSFT), which wants its software used in the next generation of cable services.
Telekom said it is sticking with its original timetable of announcing one or two of the cable deals this year, with the rest to follow in 2000.
Telekom's cable television network is the largest in the world, reaching about 18 million homes, although two-thirds of them are not connected directly. Telekom is being forced to loosen its grip on the network by antitrust regulators and by the need to finance the estimated $2.5 billion cost of upgrading the network's technology.
|
|
|
|
|
|
Deutsche Telekom
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
