Deutsche Telekom move on C&W confuses City
Saturday 13 April 1996
The German group moved to quash speculation that it plans to bid, saying that it is looking at a variety of ways of expanding its European interests.
Deutsche Telekom's finance director, Joachim Kroeske, said that ,while he did not rule out a bid for C&W, "I do not think a takeover of C&W by Telekom is necessarily the one that will happen. There are other possibilities."
His comments fuelled speculation that Deutsche is seriously considering the acquisi- tion of Mercury Communications, C&W's UK arm.
Mercury is BT's big rival in the provision of telephony service in Britain and would have to be divested if the merger goes ahead. BT is thought to view Deutche as one of the preferred bidders for Mercury. Other would- be suitors are said to include AT&T of the US, Italy's Stet, and a consortium of US-controlled cable companies.
City analysts believe that Deutsche has earmarked the UK as a priority but that the group would not bid alone. Deutsche has tailor-made partners in the form of France Telecom and Sprint of the US, which are already its allies in the Global One organisation.
Shares in C&W rose 9p to 535p amidst conflicting rumours over potential suitors. Neither BT nor Cable, which have confirmed they are in talks that could lead to a merger, was willing to comment.
At the same time the Chinese government appeared to hint for the first time that it is concerned about an effective takeover of C&W, which is the majority shareholder in Hongkong Telecom.
Without approval by the Chinese authorities, any planned merger between the UK groups would be still-born as Hongkong Telecom is a key motive in BT's desire to acquire the rival group.
Yang Xianzu, China's vice-minister for post and telecommunications, told delegates at a Hong Kong conference that he was concerned about the issue but refused to elaborate. He later said: "We do not have much information about the matter on hand."
Under present discussions between the companies, the potential merger would take the form of a reverse takeover by C&W. Talks are being conducted largely by advisers, with NM Rothschild acting for BT and Goldman Sachs for C&W.
City sources say that the move has the tacit blessing of the UK Government. However, Ian Lang, Secretary of State for Trade and Industry, recently took the unusual step of issuing a statement denying that any approval in principle had been given.
The merger, which could happen within weeks, would also be scrutinised by the industry regulator, Oftel. Don Cruickshank, director general, has said he would be concerned to see Mercury taken over by a over by a strong management commited to competition.
- 1 Cyclist who knocked down three-year-old girl says his life has been 'destroyed'
- 2 A politically correct lefty goes to see Top Gear live – you'll probably believe what happened next
- 3 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 5 Snoop Dogg on why he doesn't regret displaying misogyny towards women
Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
Woman accidentally shoots herself in the head while posing for a selfie
How China's richest man Li Hejun lost $15bn in an hour - and made a fortune
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Snoop Dogg on why he doesn't regret displaying misogyny towards women
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...