Report: DT Rekindles Bid for Qwest

BERLIN (07/17/2000) - German telecommunications giant Deutsche Telekom AG (DT) is renewing informal merger talks with U.S. carrier Qwest Communications International Inc., according to The New York Times.

The newspaper, citing "executives close to both companies," said Monday DT chairman Ron Sommer had recently met with Philip P. Anschutz, Qwest's largest shareholder. Executives stressed that the talks are in the "most preliminary stage," the report said.

DT was widely reported to be interested in acquiring Qwest earlier this year.

The U.S. company stated in March that "a major telecommunications company" had withdrawn a takeover bid, after USWest Inc. publicly questioned the offer.

Qwest was then in talks to acquire USWest; the deal was finalized on June 30.

A DT spokesman said the company refuses as a matter of policy to comment on specific merger rumors. "Deutsche Telekom wants to expand, and the United States is one of the possible markets," he said. "We have made it clear that if we do pursue something, we would like in the long term and medium term to have management control," he added. In other words, DT is looking to acquire at least a majority stake.

Qwest officials could not be immediately reached.

Merger speculations are swirling around DT on a number of fronts. The New York Times report referred to ongoing negotiations with VoiceStream Wireless Corp., quoting executives as giving the deal "a better than 50 percent chance of taking place." DT has also been linked in reports with Britain's Cable & Wireless PLC, the U.S. carrier BellSouth Corp., and Bermuda-based Global Crossing Ltd.

"DT desperately needs a solid international partner," said Eric Owen, London-based research director at market researcher International Data Corp.

(IDC). "They've been courting a number of companies for a number of years. It sounds like they're probably going to invest in an American presence."

Owen added that despite the rumors about other takeover candidates, DT's main focus is on the U.S. carrier Sprint Corp. "They're making these inquiries about other companies to try to show Sprint that there are other fish in the market," he said.

IDC is a subsidiary of International Data Group Inc., the parent company of the IDG News Service.

Deutsche Telekom, in Bonn, can be reached at +49-228-181-4949, or via the Web at http://www.telekom.de/. Qwest, in Denver, is at +1-303-291-1400, or at http://www.qwest.com/.

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