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.
