Apax Partners, the British venture capitalist, is considering a bid for the UK assets of Global Crossing, the collapsed US telecoms business.
The news will be a huge blow to Energis, the troubled telecoms operator, which had hoped for a similar rescue from the cash-rich finance house.
Apax has a significant head start on other companies interested in bidding for Global Crossing UK.
Former Energis chief executive Mike Grabiner joined Apax as a director last month and is understood to be working on putting together the bid.
Global Crossing UK started life as the telecoms division of the former British Rail. The business was sold to defence group Racal Electronics when the rail network was privatised.
In 1999 Mr Grabiner came inches away from buying the business from Racal for £750m. But after spending weeks of due diligence on the deal, Energis's offer was trumped at the eleventh hour by Global Crossing, which stormed in with a £1bn offer.
Working with his brother Stephen, who is also a director of Apax, Mr Grabiner could now have the last laugh. This would be at the expense of his former company. With Global Crossing UK coming on to the market at the same time as Energis is seeking offers, prices will almost certainly be depressed. Some analysts believe Global Crossing's telecoms network – 8,000km beside Britain's railway lines – is more attractive than Energis's, which is strung along electricity pylons.
Bids for Global Crossing's UK network are not expected to exceed £400m, due to the depressed nature of the telecoms sector.
A spokesman for Global Crossing confirmed that the UK business was being put up for sale and bids would be sought before the summer.
In January Global Crossing filed for Chapter 11 bankruptcy protection in America. Since then the company has been probed over its accounting techniques, which were established after advice from Andersen, the accountancy firm at the centre of the Enron scandal.
"Any cash from the UK business would improve our ability of getting out of Chapter 11," said the spokesman.
However, Apax won't be alone in casting its eye over Global Crossing UK. A well-placed source said Vodafone was also interested.
It is understood that the mobile operator wants to boost its offering to its business customers by providing fixed-line services. Vodafone refused to comment. It is further understood that Kohlberg Kravis Roberts and Carlyle Group, are also interested in Global Crossing UK.Reuse content