Well-traveled cable and satellite executive Carl Vogel was named CEO of ICG Communications Inc. last week, in a move some Wall Street analysts perceived as an attempt by ICG investor Liberty Media Corp. to rescue the struggling local-exchange carrier.
Vogel replaced ICG CEO Shelby Bryan, whose resignation came two weeks after ICG cut its cash-flow estimates for 2001 and was downgraded by several Wall Street analysts, prompting a stock-price plunge.
"It's Liberty flexing its muscle, saying, 'If you can't run this business, we will,'" said Janco Partners analyst Roger Metz.
Vogel will maintain his current posts as senior vice president of Liberty Media Group and CEO of Liberty Satellite and Technology Inc. while working full-time for the CLEC, an ICG spokeswoman said.
Liberty invested $500 million in ICG in February, picking up a 24 percent stake in the company. But Liberty has seen its investment in the company sour, with ICG shares dropping from $29 when Liberty invested to $5.88 on Aug. 22, the day before Vogel's appointment was announced.
ICG shares did gain some ground following the Vogel announcement, closing at $6.47 on Wednesday.
Some analysts also predicted the move could spark some consolidation in the CLEC market. In addition to its ICG stake, Liberty owns 36 percent of Vienna, Va.-based CLEC Teligent Inc. Hicks Muse, Tate & Furst Inc., which invested $220 million in ICG when Liberty invested in the company, also owns a significant stake in Teligent.
"There's an opportunity for somebody to roll up some of these regional CLECs and to create an international player," said S. Muoio & Co. analyst Salvatore Muoio, who covers Liberty Digital.
ICG and Teligent were reportedly on the verge of cutting a merger deal earlier this month, before ICG cut its earnings estimates. ICG and Teligent officials declined to comment last week when asked about the prospects of consolidation.
ICG and Teligent also agreed to a stock swap in February that gave Teligent a 6 percent stake in ICG, and left ICG with a 1.7 percent stake in Teligent.
Vogel was CEO of now-defunct DBS operator Prime-Star Inc. before joining AT & T Broadband last year as chief operating officer and then shifting over to Liberty. Previously, he was No. 2 atEchoStar Communications Corp. and a marketing executive at Jones Intercable Inc.
Vogel was unavailable for comment last week, a Teligent spokeswoman said. Liberty Media officials didn't return calls.
