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By Rich Miller
Carrier Hotels Editor
Posted Jan 14, 2004
On Dec. 8 Gores and Cable & Wireless announced a deal in which an affiliate of Gores would acquire the assets of CWA for $125 million, with $50 million in cash and the remaining $75 million in a note from Gores. CWA filed for Chapter 11 bankruptcy protection to conduct the sale under bankruptcy rules, which gives debtors the option of rejecting costly leases.
The companies mulling bids are reported to include Oaktree Capital Management, Cerberus Capital Management, WilTel Communications and Level 3. We'll see if the opportunity to streamline the asset transfers through Chapter 11 encourages buyers to step up and top Gores' bid.
In any major bankruptcy asset sale, finding a lead bidder - known as a "stalking horse" in the bankruptcy trade - is critical. It reassures creditors that the asset will be sold, and establishes a ballpark for other bidders to use in a cost/benefit evaluation of a bid. The Gores deal and court-sponsored auction present suitors who previously passed on a CWA bid with an opportunity to reconsider the assets under Chapter 11 rules.
One way or another, we'll know more soon about whether Level 3 is serious about acquiring distressed telecom assets. The structuring of the sale as a prepackaged bankruptcy is similar to Level 3's deal to buy Genuity last year. Bids are due by Friday.
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http://www.carrierhotels.com/news/2004/Jan/14/new_bidders_for_cw_print.html
New Bidders for C&W?
By Rich Miller
Carrier Hotels Editor
Posted Jan 14, 2004
Will Gores Technology wind up owning the Cable & Wireless America (CWA) hosting assets? Or will other suitors emerge and bid up the price in a bankruptcy court auction set for next Tuesday? A Reuters report says that as many as four other companies are contemplating bids for C&W's hosting unit, which includes 15 data centers and more than 1,000 customers.
On Dec. 8 Gores and Cable & Wireless announced a deal in which an affiliate of Gores would acquire the assets of CWA for $125 million, with $50 million in cash and the remaining $75 million in a note from Gores. CWA filed for Chapter 11 bankruptcy protection to conduct the sale under bankruptcy rules, which gives debtors the option of rejecting costly leases.
The companies mulling bids are reported to include Oaktree Capital Management, Cerberus Capital Management, WilTel Communications and Level 3. We'll see if the opportunity to streamline the asset transfers through Chapter 11 encourages buyers to step up and top Gores' bid.
In any major bankruptcy asset sale, finding a lead bidder - known as a "stalking horse" in the bankruptcy trade - is critical. It reassures creditors that the asset will be sold, and establishes a ballpark for other bidders to use in a cost/benefit evaluation of a bid. The Gores deal and court-sponsored auction present suitors who previously passed on a CWA bid with an opportunity to reconsider the assets under Chapter 11 rules.
One way or another, we'll know more soon about whether Level 3 is serious about acquiring distressed telecom assets. The structuring of the sale as a prepackaged bankruptcy is similar to Level 3's deal to buy Genuity last year. Bids are due by Friday.
http://www.carrierhotels.com -- Phone: (609) 243-7525