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DT may bid for One-2-One
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May 10, 1999: 7:55 a.m. ET
Report: Deutsche Telekom preparing $16.3B offer for U.K. mobile phone firm
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LONDON (CNNfn) - Worried that regulators may thwart its planned merger with Telecom Italia, Deutsche Telekom is ready to launch a $16.3 billion bid for One-2-One, the mobile phone firm owned jointly by Britain's Cable & Wireless and U.S.-based MediaOne, according to a published report.
One-2-One was put up for sale in March, and reports suggest that the short list of bidders for the company is likely to include some of Deutsche Telekom's (FDTE) fiercest competitors.
Among the hopefuls for the mobile phone company are Deutsche's German archrival Mannesmann (FMMN), Vivendi of France, and U.S. powerhouses Bell Atlantic (BEL) and Microsoft (MSFT), Britain's Sunday Business reported over the weekend.
Other firms said to be mulling a bid of at least 10 billion pounds are France Telecom (PFTE), MCI Worldcom (WCOM), and Cegetel.
Microsoft chief Bill Gates may opt to find a partner in order to fend off possible governmental opposition to a bid in both Europe and the United States, Sunday Business said.
The software giant last week bought a 30 percent stake in British cable operator Telewest (TWT) from MediaOne. The purchase is seen as part of Gates's strategy to incorporate Microsoft software into digital cable set-top boxes.
Cable & Wireless has yet to reach a final decision on the One-2-One unit, according to the newspaper. One apparent option entails floating the unit on the open market, with its two principal shareholders retaining minority interests, the paper said.
Deutsche Telekom is believed to have decided on the bid in the face of mounting obstacles to its planned $82 billion union with Telekom Italia. That deal itself was in large part the product of a defensive strategy by TI to ward off the unsolicited advances of Olivetti.
The newspaper said analysts who had valued Cable & Wireless at around 7 billion pounds ($11.41 billion) -- including 1.5 billion pounds of debt -- may be surprised at the value of the expected bids for the mobile phone venture.
Cable & Wireless shares rose 0.7 percent in London Monday, to 840 pence, while Deutsche Telekom stock was down 0.50 euros at 35.50 in Frankfurt.
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