Global Crossing Ends Bid to Buy Equant, Sources Say

Global Crossing Ltd., which is building a worldwide undersea telephone and data network, has ended talks to buy Equant, owner of the world’s largest data network, sources familiar with the companies said.

The talks fell apart within the past few days because Global Crossing was unwilling to offer enough to satisfy Equant, one source said. Earlier this week, Equant was reportedly in talks to be acquired for $10 billion by either Global Crossing or France Telecom.

France Telecom and several other phone companies still are considering a purchase of Amsterdam-based Equant, though none of the discussions is very far advanced and they may not lead to anything. Equant, with a market value of about $8.9 billion, is attractive in part because its network reaches businesses in more than 220 countries and territories.

Officials at Equant; Bermuda-based Global Crossing, whose executive offices are in Beverly Hills; and Paris-based France Telecom declined to comment.

Equant shares fell $2.06 to $43.94 on the New York Stock Exchange. Global Crossing rose 75 cents to $30.75, although its shares have fallen 39% this year. France Telecom’s American depositary receipts fell $7.13 to $151.38 on the NYSE.

Equant was created in 1998 out of a reservation network formed five decades ago by the world’s major airlines. Its biggest shareholders, the SITA airline cooperative and Morgan Stanley Capital Partners, reduced their combined stake in the company to less than 38% in December and now hold just four of the company’s nine board seats.

Equant competes against companies such as Cable & Wireless, WorldCom Inc. and France Telecom. It could help an acquirer lure multinational customers needing voice, data and network services.

Buying Equant “would be a good strategic fit” for Global Crossing, said Merrill Lynch & Co. analyst Adam Quinton, who rates Global Crossing short-term “accumulate” and long-term “buy.”