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July 2, 1997updated 05 Sep 2016 12:38pm

CABLE & WIRELESS TAKES OVER OPTUS AS BELLSOUTH BACKS OUT

By CBR Staff Writer

Not wanting to be left behind as previously state-owned telecom monopoly giants, such as Deutsche Telekom and France Telecom, look to build up global alliance and interests. Cable & Wireless Plc is to take control of Australia’s Optus Communications Pty Ltd. Optus is the second largest operator in Australia although its trails well behind state-controlled Telestra. C&W has been growing closer to the company in a series of moves over the past few months which include C&W alumni Peter Howell-Davies replacing Ziggy Switkowski as ceo and two other top level management appointments drawn from C&W (June 23). C&W, which already had a 26.7% stake in Optus, will gain a 51% control of the company through a series of deals. Under the proposed agreement, C&W will pay around $731m for BellSouth’s 490m shares. It will also transfer 22.3% of its shareholding in Western Colombian mobile operator Occel, to BellSouth. In addition, Optus will issue 298.9m share options, which when exercised, will bring Cable & Wireless’ shareholding to around 51%. Cable & Wireless chief executive Richard Brown said Optus was a fully integrated telecommunications, information and entertainment company and as such enables his company to offer a full range of integrated services, which fits well with its view of the future. By contrast, he said, the Occel business in Columbia is a dilutive wireless business, where the company cannot offer these services, and therefore it is planning its exit. BellSouth said it will probably post an extraordinary gain in the third quarter ending September 30 resulting from the sale. Charles C. Miller, president of BellSouth International said about the deal: “This decision was a difficult one for us to make, as our experience with Optus has been overwhelmingly positive. We believe, however, it is the right decision for both Cable & Wireless and BellSouth, based on our respective strategies for international growth.” The deal will require clearance from the Australian authorities before it can be completed.

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