BT may attempt AirTouch bid

Possibly trying to join a growing list of suitors, British Telecommunications PLC (BT) is said to be searching for a partner to help it launch a $US59 billion offer for AirTouch Communications. A spokesman for BT refused to comment on a report in the Financial Times, which said that BT will launch an offer to counter a bid made last week by the UK's Vodafone Group, which recently acquired BellSouth's New Zealand cellular business.

Possibly trying to join a growing list of suitors, British Telecommunications PLC (BT) is said to be searching for a partner to help it launch a $US59 billion offer for AirTouch Communications.

A spokesman for BT refused to comment on a report in the Financial Times, which said that BT will launch an offer to counter a bid made last week by the UK's Vodafone Group, which recently acquired BellSouth's New Zealand cellular business.

BT reportedly notified Morgan Stanley & Co., which is advising AirTouch, of its interest in buying the company, according to the report. Like the other suitors, which include the first bidder Bell Atlantic as well as Vodafone, BT is apparently especially interested in AirTouch's European licenses for mobile telephony. AirTouch is one of the largest providers of mobile telephony in the US.

BT most likely has the money it needs to purchase AirTouch on its own, but the complications go further than available cash. Under the terms of its alliance with AT&T, it is barred from competing with AT&T in the USSince AT&T has cellular businesses that compete directly with AirTouch in the US, a tie-up between BT and AirTouch could prove troublesome to BT's pending deal with the US telco.

"At the time of the original deal (between AT&T and BT) we said we wouldn't compete," confirmed Simon Gordon, BT spokesman.

At the same time, BT and AT&T can't join forces to buy AirTouch either, since the combined company would likely be considered anticompetitive by regulators. Therefore, an AT&T-BT-AirTouch linkup is unlikely, Gordon said, since AT&T and BT are still awaiting approval for their global alliance.

One other twist, however, is that BT may be discussing an alliance with Bell Atlantic to jointly buy AirTouch, according to the report.

Another potential suitor, MCI WorldCom has ruled out entering the competition for AirTouch, the company said on Friday.

AirTouch Communications Inc. can be reached at +1-415-658-2000 or http://www.airtouch.com/. British Telecom can be reached in London at +44-171-356-5000 or on the World Wide Web at http://www.bt.com/.

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