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GST assets sold for $690M
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August 25, 2000: 3:33 p.m. ET
Time Warner Telecom wins auction for ailing phone service provider's assets
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NEW YORK (CNNfn) - Time Warner Telecom Inc. won an open auction Friday to purchase nearly all the assets of local exchange carrier GST Telecommunications Inc., currently under Chapter 11 bankruptcy protection, for $690 million cash, extending the company's geographic footprint to the West Coast.
Littleton, Colo.-based Time Warner Telecom, which is 48 percent owned by Time Warner Inc. (TWX: Research, Estimates), the parent company of CNNfn, said the agreement includes all of GST's assets except a substantial majority of the company's Hawaii assets and residual cash balances. Bob Meldrum, a Time Warner spokesman, said the Hawaii assets were excluded because the telecommunications company already has a significant presence there.
The two companies previously struck an agreement to sell a majority GST's assets for $450 million, but the deal ultimately fell through.
 Time Warner's bid was approved by the U.S. Bankruptcy Court in Delaware Friday after the completion of a four-day open bidding process. The two companies now must sign a definitive purchase agreement and hope to close the merger by the end of the year.
The transaction will provide Time Warner with nearly 100,000 customers, concentrated mostly in the Northwest.
GST primarily provides local-exchange and long-distance telephone service, but the Vancouver, Wash.-company has also been bulking up its Internet backbone, pushing east to Chicago and Washington, D.C. A heavy debt load and cash shortages forced the company to seek bankruptcy court protection in May.
Time Warner Telecom (TWTC: Research, Estimates) shares gained 3/16 to 62-1/4 in late afternoon trading Friday. 
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