Former Mercury chief bids for Racal Telecom

Duncan Lewis, the former head of the Mercury phones company and senior Granada executive, is planning a return to the industry by launching bid to buy Racal's telecommunications business.

Chris Godsmark, business correspondent, reports on the future of one of the UK's largest telecoms networks.

Racal in effect raised a for-sale sign over its telecommunications business this summer when it appointed Merrill Lynch, the US investment bank, to hunt for potential partners or buyers. At the same time Goldman Sachs was called in to carry out a similar review of Racal's data products division.

The deadline for bidders to enter the ring expired on Friday and Mr Lewis is understood to have put in a proposal, backed by Schroder Ventures, the venture capital arm of the merchant banking group.

Mr Lewis, who resigned as chief executive of Granada's media business last year, was not available for comment yesterday. However, his plan is understood to be a management buy-in, where he would join with other former colleagues to buy Racal Telecom outright.

If the Lewis bid is successful it would be a high profile comeback for the executive, who left Granada after a simmering row with Charles Allen, the group's chief executive and Gerry Robinson, chairman. Since his departure Mr Lewis has been working on business projects and, apparently, enjoying a career break.

There had been speculation that he would return to Cable & Wireless to run its combined telephones and cable TV empire, C&W Communications. Instead Dick Brown, C&W's chief executive, chose another Granada executive, Graham Wallace for the top job. .

Before joining Granada Mr Lewis, a former BT manager, moved to Cable & Wireless where he rose to become chief executive of Mercury, now part of C&W Communications. During his nine month reign at Mercury he slashed costs there, cutting some 2,000 jobs.

The Lewis bid is thought to offer several hundred million pounds for Racal Telecom, which had sales of pounds 260m last year and, with profits of pounds 43m, accounted for most of Racal's pounds 70m earnings. In terms of sales, Racal Telecom is more than twice the size of Energis, the telecoms group which National Grid is to float this year with an estimated price tag of around pounds 1bn.

It was Racal's 1995 deal to buy British Rail's telecommunications operation, BRT, which catapulted Racal Telecom into a leading player in the market. Apart from supplying Railtrack and train operating companies with phone services, it also has extensive private networks and claims to be the biggest contractor to the Government.

Racal yesterday confirmed that the deadline for bids had closed, but insisted a sale was just not the only route to boosting the telecom's businesses prospects. "We're looking at all the options. Don't assume that there will be an outright sale. Don't assume anything," a spokesman said.

Sir Ernest Harrison, Racal's long-standing chief executive, launched the Merrill Lynch review after a series of damaging profits warnings at Racal which have dented his reputation as the leading defender of shareholder value.

At the time he indicated Racal Telecom was coming under increasing competitive pressure from rival telecoms groups which would depress its profits in the future.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trade Desk Specialist (Linux, Windows, FIX, Finance, Networks)

£60000 per annum: Harrington Starr: Trade Desk Specialist (Linux, Windows, FIX...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Project Manager - ETRM/CTRM

£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...

C#.NET Developer

£300 - £350 per day: Harrington Starr: C#.NET Developer C#, WPF,BLL,MVVM, SOA...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform