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BT & GTE CORP IN MERGER RUMORS

GTE Corp shares were the most active on a quiet, post Thanksgiving market Friday amidst rumours that British Telecommunications Plc had opened preliminary merger talks with GTE Corp. The rumors stemmed from a report in USA Today, which claimed that BT was considering a double acquisition, looking at making a bid for a smaller carrier at the same time as merging with GTE. The paper named Dayton, New Jersey-based business carrier Teleport Communications Group Inc or Florida, Tampa-based Intermedia Communications Inc as possible targets. Teleport, of course, is currently engaged in a $1,000m takeover bid of its own for ACC Corp (CI No 3,300). GTE was a rival bidder against BT for MCI Corp, but the two companies formed a closer relationship during the takeover drama as WorldCom Inc played the role of a common enemy. Four BT officials met with GTE chief executive Chuck Lee in New York early in November as the battle progressed (CI No 3,285). BT would like to get its hands on GTE’s 20m user local network services business, as well as the Qwest long distance fiber optic network and recently acquired BBN Corp Internet service provider business. The two have roughly equal market capitalization values of $49,000m. GTE declined to comment on the report.

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CBR Staff Writer

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