Gores Technology May Bid for Global Crossing
Page 1 of 1
Buyout and turnaround specialist Gores Technology is considering a bid for Global Crossing, the bankrupt voice and data carrier, according to published reports.
Just what Los Angeles-based Gores is offering is not clear at this point, but someone close to the deal said that it would offer "substantially more" than they would get from a $750 million bid by Hutchison Whampoa Ltd. and Singapore Technologies Pte Ltd., according to the Wall Street Journal. Gores isn't speaking openly about it and has released no official news about an offer.
It is believed Gores may file its bid this week with the U.S. Bankruptcy Court for the Southern District of New York, which is the same court where Global Crossing filed for Chapter 11 of the U.S. Bankruptcy Code protection in January.
Debate rages back and forth as to whether Gores' offer should necessarily be higher than the bid by Hutchison Whampoa and Singapore Technologies, but some feel the ultimate value that each deal presents will be the determining factor.
Concern about Global Crossing has swirled and swelled over the last month or so. And if it hasn't been acquisition-related news, it's been ominous tidings of accounting improprieties. On Feb. 8, the U.S. Securities and Exchange Commission confirmed that it had opened an investigation of the company on the strength of a letter written by the outfit's former vice president of finance, which alleged that the company and its auditor, Arthur Andersen, were inflating pro forma values for cash revenue and adjusted EBITDA by including amounts for which cash were not received or where there had been non-monetary exchanges of capacity.
Then, on Feb. 11, the SEC said it requested documents from Qwest, but the telecommunications firm's tie to Global Crossing is not clear. Finally, just last week Global Crossing said it would delay its quarterly and annual fiscal results.
As for other suitors interested in parts of the company, the word is there may be many, including AT&T Corp., WorldCom Inc. and SBC Communications Inc., who are said to be eyeing Global Crossing's fiber-optic network.
Gores is a buyout firm to be sure. It snagged credit-card processing terminal maker VeriFone Inc. from Hewlett-Packard Co. But Gores is perhaps best known for buying Learning Co. from Mattel Corp. and patching its problems in October 2000.