AAPT bidding sparks four-way battle

As many as four carriers, including two from the US, are set to enter a bidding war for control of Australia's third-largest telecommunications company, AAPT, according to reports.

Telecom New Zealand last week spent $A171 million for a 9.9 per cent share in AAPT to counter a hostile takeover bid launched last month by Australia's second biggest carrier, Cable & Wireless Optus.

Bids from MCI WorldCom and another unidentified US carrier are also in the offing, according to local news agencies, quoting internal AAPT sources.

"Given Optus' bid for AAPT, Telecom New Zealand felt it prudent to take a minority position in order to preserve its strategic options," Telecom New Zealand chief financial officer Jeff White said.

C&W Optus currently holds around 10.6 per cent of AAPT, but saw its $A5 per share takeover bid rejected by AAPT last month as inadequate. AAPT officials said last week that Telecom New Zealand's share purchase, at an average of $A5.7 per share, vindicated the board's decision to reject C&W Optus' original bid.

Possible scenarios include a renewed bid at the higher price by either C&W Optus or Telecom New Zealand, or an even higher offer from MCI WorldCom, local analysts said. C&W Optus officials said they might walk away from a bidding war, while MCI WorldCom has made no statement about any possible interest.

The various carriers already cooperate on several projects. AAPT and Telecom New Zealand have long-standing commercial agreements over the routing of international calls. Telecom New Zealand and C&W Optus are also joint shareholders in the Southern Cross cable network, a sea cable being built between Sydney and the US west coast for data communications.

AAPT has been more aggressive than rivals C&W Optus and Telstra in cutting prices and offering new services in Australia, analysts say.

The carrier plans increased competition and lower prices for corporate customers when it begins rolling out a $126 million local multipoint distribution service (LMDS) broadband wireless network in Australian cities later this year.

The company paid $66 million in February to secure all the broadband wireless spectrum on offer, becoming the only telecommunications company in Australia with access to LMDS technology.

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More about AAPTCable & WirelessC&W OptusMCIMCI WorldComOptusSouthern Cross CableTelecom New ZealandTelstra CorporationWorldCom

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