Deutsche Telekom rules out Racal bid
Tuesday 04 November 1997
At least one other continental telephones giant, Telecom Italia, had examined making a provisional offer before last month's deadline for bids, but has also backed away. AT&T, the world's second-largest phone company which is frequently tipped to buy a UK network, had also taken an interest in the sale but has decided not to make an offer.
Deutsche was thought to be considering buying a 60 per cent stake in Racal Telecom, leaving Racal with the remaining 40 per cent in a deal which would value the telephones and data network at around pounds 575m. However, industry watchers had doubted Deutsche's intentions because the company is also expected to include Cable & Wireless in its Global One alliance with France Telecom and Sprint of the US, a move which would give the German group access to C&W's own UK network.
The decision by Deutsche not to launch a formal bid leaves just one confirmed contender in the running - Duncan Lewis, the former senior Granada executive and chief executive of the old Mercury phones business. Mr Lewis has been backed by Schroder Ventures, the venture capital arm of the merchant bank and is thought to be offering around pounds 450m for all of the business.
Sir Ernest Harrison, Racal's long-standing chairman, announced the review of the future of Racal Telecom and the group's data products division in June after a string of profit warnings dented the company's share price. Merrill Lynch, the US investment bank, was appointed to search for partners for the telecoms business, though Racal has not ruled out a sale of the whole division.
Racal Telecom is one of the UK's largest networks, with 5,700km of optical fibre and 7,000km of copper wire. It includes the old British Rail telecommunications operation, which runs alongside railway tracks, which Racal bought for pounds 130m in 1995.
A Racal spokesman declined to comment on the discussions, though sources close to the company insisted that more than one bidder had thrown their hat into the ring before the deadline expired.
- Chris Godsmark
- 1 PlayStation and Xbox hacked by Lizard Squad
- 3 The Grace Dent Christmas Questionnaire
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 Vagina canoe artist defends herself over ‘obscenity’ charges
PlayStation and Xbox hacked by Lizard Squad
Boxing Day snowfall set to push even more bargain-hunters online for sales
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Postcard from... The Vatican
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...