Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Tuesday, June 1, 1999 Published at 15:40 GMT 16:40 UK


Business: The Company File

Japan phone bids raised

The UK telecoms company refuses to hang up its bid

Cable and Wireless (C&W) has raised its bid for Japanese phone group International Digital Communications (IDC).

Its move came a day after rival bidder and Japanese market leader, Nippon Telegraph and Telephone (NTT), upped its own offer for IDC.

C&W launched the cross-border takeover battle, unprecedented in Japan, last month with a 62.4bn yen (£321m) bid. The raised offer - the third - now values IDC at 69bn yen (£356m).

Competition concern

"We are positive about winning this. We will fight," a spokeswoman for the UK's second largest phone firm said.

C&W is hungry for a slice of the world's second largest telecoms market and says it would make IDC a key hub in its global business network.


[ image: NTT is controlled by the Japanese government]
NTT is controlled by the Japanese government
Graham Wallace, chief executive at the British firm, was in Japan last month to meet with IDC's shareholders and government officials.

The contested bid is unusual in Japanese corporate history and has triggered warnings from the UK that a successful takeover by NTT would raise competition and regulatory issues.

C&W is keen to point out that NTT is controlled by the Japanese government and says the bid battle is a test case for Japan's willingness to deregulate its markets.

Added urgency to its efforts to enter the Japanese market came with the unveiling in April of British Telecommunications and US based global partner AT&T's plan to take stakes worth a total $1.85bn in Japan Telecom.

Meanwhile NTT, the former state monopoly, wants the deal because it would give it a strong start in the international market, which it will enter for the first time next month under deregulation of the telecoms industry.

NTT's latest offer, put to the board of IDC on Tuesday, was for 68bn yen.

The British bidder, as one of the founding shareholders in IDC, is directly informed by the board of any new bid from its rival.

Analysts puzzled

The escalating takeover battle has created an increasingly murky picture for IDC shareholders.

"The situation is so fluid that we cannot decide at this time whether to accept a new offer from C&W," said a Toyota spokesman.

Toyota, along with trading company Itochu and C&W, is a major shareholder of IDC, each owning a 17.7% stake.

But the series of small incremental rises in the offers has puzzled analysts.

"NTT may not be particularly serious about buying IDC," suggested Nikko Salomon Smith Barney analyst Makio Inui.

Mr Inui said the price tag so far put on IDC already exceeds its fair value. Some analysts have calculated it is worth 40bn yen. Its current market capitalisation is 31.2bn yen.

The offer from NTT was enough to push the firm's stock price up 3% in Tokyo, before C&W's latest bid was unveiled.

C&W has given shareholders until 15 June to decide on its offer.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Company File Contents


Relevant Stories

06 May 99 | The Company File
Japanese phone battle hots up





Internet Links


Cable & Wireless

NTT


The BBC is not responsible for the content of external internet sites.




In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles