Hutchison, STT set sights on Global Crossing


Billionaire Li Ka-Shing controls Hutchison Whampoa, which is said to be bidding with STT for Global Crossing

Staff and wires

HONG KONG, China -- Hutchison Whampoa and Singapore Technologies Telemedia have emerged as the leading candidates in a joint bid to buy failed communications company Global Crossing.

Reuters reports that the joint bid -- less than the previous one submitted by the companies in January -- was expected to be the winning one at the auction deadline Tuesday in New York.

Hutchison and STT's previous bid was worth $750 million for 79% of Global Crossing, but at the time creditors for the bankrupt telecoms firm felt that price was too low.

Global Crossing filed for Chapter 11 bankruptcy protection in January. Its assets are worth an estimated $22.4 billion.

Both companies played down the reports when contacted by CNN, neither admitting to having put in a bid for Global Crossing but both leaving the door open for a future bid.

STT spokeswoman Melinda Tan told CNN "We have not yet determined whether to bid," while Laura Cheung from Hutchison said "We are keeping our options open."

Hutchison and STT aren't the only prospective buyers, with competition expected from Level 3 Communications, a joint bid from Gores Technology and Platinum Equity, and former Global Crossing executive David Walsh, backed by Bank One Corp.

Back in the game

Reports of Hutchison's re-emergence in the bidding for Global Crossing after falling out with the previous offer surfaced last week when The New York Times reported a source close to the bidding process as saying Hutchison "kissed and made up with the banks." (full story)

Sources close to the talks told Reuters that under the new deal being offered, creditors would be offered more than 21 percent of Global Crossing.

"But they will not be getting any cash," added the source. "They will be taking convertible paper which can be converted into Global Crossing shares at a later date."

The same sources also confirmed to Reuters that the new deal was worth far less than the old one.

"They should have done the deal then -- it would have made Hutch and STT look very stupid. But now they just look very stupid themselves and make the two look good."

Global Crossing owns and operates a fiber-optic network that connects 200 cities in 27 countries across the world.

It also owns 59 percent of Asia Global Crossing, which has been eyed by companies such as China Netcom and Purple Communications as an acquisition target.