Packer doesn't say yes to Optus

Prolonged negotiations between Ecorp and Cable & Wireless Optus (CWO) about a possible $8 billion merger of Ninemsn and the carrier's broadband cable operation have ended without a winner.

Ninemsn is reportedly Australia's most visited website while CWO claims to offer the country's most advanced high-speed internet cable network. The discussions between the big hitters fell apart when it came to renewing exclusivity options governing the negotiations. Optus refused to extend the options in a bid to force a deal.

The push and shove backfired for Optus when James Packer, whose Ecorp jointly owns Ninemsn with Microsoft, called CWO chief executive Chris Anderson yesterday to inform him that the talks, which had been going for about eight months, were over.

Inking the deal, called Project Mercedes, would have been attractive to both parties, with the cable operation getting the financial might of the Packer empire, and Ecorp getting access to CWO's mobile network. But the ink never got to the paper because of the carrier's ongoing refusals to allow Ninemsn traffic to be delivered via the mobile network -- preferring to keep that lush pasture to itself.

CWO declined to make any detailed comment, but a spokesperson confirmed that it had refused to extend the exclusivity period on the deal. Ecorp was not available for comment.

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