RealTime IT News

NTT Extends Verio Deadline

NTT Communications Corp. Friday announced it would extend the expiration date of its tender offer for the purchase of Verio Inc.

The original deal was set to expire at Midnight tonight. NTT Communications extended the deadline for the acquisition by two weeks. The Tokyo-based firm's attempt to acquire Verio is now set to expire at Midnight EDT, on July 28, 2000.

Norwest Bank Minnesota N.A., the depositary for the tender offer, informed NTT Communications that as of Thursday, approximately 46 million shares of Verio common stock, 3 million shares of preferred stock, and 1 million warrants to purchase shares of Verio common stock had been validly tendered.

NTT and Verio are cooperating with the U.S. Committee on Foreign Investment while the committee continues its investigation of the proposed transaction.

According to NTT Communications, under the Exon-Florio Amendment to the Defense Production Act of 1950, the Committee on Foreign Investment cannot extend its review of the deal beyond August 29, 2000.

Japan's long-distance fees gained relevance in trade negotiations over the past few weeks when the U.S. Federal Bureau of Investigation raised national security concerns about NTT Communication's $5.5 billion takeover bid for Verio.

NTT Communications contends that the committees national security concerns would not prevent the companies from closing the transaction with Verio.

A subsidiary of Nippon Telegraph and Telephone Corp., NTT Communications, provides long-distance and international telecom services to more than 200 countries worldwide.

Bill Whyman, Precursor Group Inc. president, said the NTT, Verio deal never had anything to do with U.S. national security concerns.

"The government salivates when a foreign ownership deal like this is announced," Whyman said. "Officials raise concerns about security and leverage the issue to secure trade deals."

Whyman's bargaining-chip analysis of the deal was confirmed Friday, when talks between the U.S. and Japan over telecom deregulation moved up one notch on the diplomatic ladder. Senior officials of the world's two largest trading partners plan to sit down and try to resolve terms that could impact the NTT, Verio deal on Monday.

U.S. trade representatives are scheduled to meet with Japanese officials for a fifth day of talks to settle a dispute over NTT's interconnection rates.

Washington argues the rates for local phone lines charged by Japan's former domestic phone monopoly are too high, making it difficult for U.S. carriers to compete in the world's second largest telecom market.