XO Communications Inc. is raising the ante in the Global Crossing Ltd.
ownership game, making a surprise $700 million bid to top an offer made by a
Singapore firm to buy the failed fiber-optic-network provider.
Reston, Va.-based XO's bid comes in $100 million beyond what Singapore
Technologies Telemedia Pte Ltd. has offered for Bermuda-based Global Crossing,
which has a network of undersea fiber-optic cables and major fiber routes
between several major U.S. cities.
It's a case of one reorganized company bidding for another reorganizing
company.
XO -- which provides broadband-communications services in 65 markets
nationwide -- emerged in January from Chapter 11 bankruptcy under the
controlling interest of financier Carl Icahn.
Amid accounting scandals and a revenue downdraft, Global Crossing filed its
reorganization papers in January 2002 and has yet to complete the process.
XO's bid includes $250 million in cash, $200 million in new 11% notes secured
by the assets of Global Crossing, $200 million in junior preferred stock in the
reformed Global Crossing subsidiary should XO acquire it and 15 million
five-year warrants to acquire stock in XO at $10 per share.
"It is our intent to provide each of Global Crossing's banks and bond-claim
holders with the same amount of cash and new notes as in the current plan and to
increase the equity consideration received by each by over $50 million," said
Icahn, who is XO's board chairman.
"In addition, our proposal can close without regulatory headaches or
financing contingencies and provides tremendous synergies between the two
organizations that can benefit both Global Crossing's creditors and XO
shareholders," he added.
