Bell Atlantic Ends Talks With AirTouch
Bell Atlantic Corp. called off talks to acquire AirTouch Communications Inc., clearing the way for British rival Vodafone Group to buy the nation’s second-largest independent cellular phone company and enter the U.S. market.
The terse, surprise announcement, which came late Friday, ends two weeks of speculation about Bell Atlantic’s plans to become the world’s largest cellular company by connecting its East Coast network with AirTouch’s West Coast network.
Vodafone, Britain’s largest cellular phone operator, now stands as the sole bidder for AirTouch. Vodafone offered $55 billion last week, topping Bell Atlantic’s $45-billion offer.
Just a day earlier, a spokesman for Bell Atlantic said the nation’s largest local phone company would beat Vodafone’s offer, according to Bloomberg News.
Bell Atlantic is awaiting federal approval of its acquisition of GTE Corp. The two deals may have been too much for New York-based Bell Atlantic to handle, said Holt Thrasher, a managing director at Broadview International, an investment bank in Fort Lee, N.J., specializing in the telecommunications industry.
Price also could have been an issue.
The Financial Times reported Friday that Vodafone was considering sweetening its bid for AirTouch, structuring it as an all-cash deal, instead of a combination of cash and stock.
Bell Atlantic would only say that its discussions with AirTouch “relating to a possible business combination have ended.” A spokesman for Bell Atlantic declined further comment. The statement was made after the close of U.S. trading.
Bell Atlantic became the second telephone company to pass on AirTouch. MCI WorldCom Inc. said last week it wouldn’t pursue a bid for the San Francisco-based company.
Vodafone now appears to be the likely winner. The company has its eye on AirTouch’s fast-growing international assets, which stretch from Sweden to Egypt.
AirTouch shares rose $4.56 to close at $83.38, and Bell Atlantic fell 69 cents to $53.13. Both trade on the New York Stock Exchange. Vodafone’s American depositary receipts rose $1.44 to $176.
