Feb 24, 2003 (07:02 PM EST)
IDT To Bid For Global Crossing
Read the Original Article at InformationWeek
NEW YORK (AP) -- Long-distance telecommunications company IDT Corp. plans to make a $255 million bid for the assets of bankrupt Global Crossing Ltd. on Tuesday, saying national security could be compromised by the current plan for investors in Hong Kong and Singapore to take over the fiber-optic carrier.
In a rambling conference call with reporters late Monday, IDT Chairman Howard Jonas and CEO James Courter--a former Republican congressman from New Jersey--pointed out that Global Crossing's fiber-optic network carries data for the Justice Department, CIA and FBI.
Consequently, Jonas and Courter said, U.S. government officials are likely to block the $250 million bid by Hutchison Whampoa and Singapore Technologies Telemedia for a 61.5 stake in Global Crossing.
"We think it is against the national interests of the United States to sell this company to a foreign entity, particularly a hostile foreign entity like the Communist Chinese and anyone who would be their partners, like the Singaporeans," Jonas said.
"We know we have obligations to our shareholders, but frankly, we think we have obligations to the country, too."
Jonas said he he had been in touch with Global Crossing CEO John Legere but was not actively encouraged by Legere to pursue the purchase.
Global Crossing spokeswoman Tisha Kresler refused to comment. The company released a statement saying that "while we're glad that IDT recognizes the increasing value of Global Crossing," it fully intends to complete its deal with Hutchison Whampoa and Singapore Technologies Telemedia.
In Singapore, Melinda Tan, spokeswoman for Singapore Technologies Telemedia, said, "We have a definite agreement with Hutchison Whampoa approved by the Bankruptcy Court to take over Global Crossing. I do not think IDT will be entertained by the court." She declinted to comment further.
Laura Cheung, a spokeswoman for Hutchison Whampoa in Hong Kong, declined comment Tuesday.
Edward S. Weisfelner, an attorney who has represented Global Crossing creditors in bankruptcy court, did not return a call seeking comment.
Last summer, Newark, N.J.-based IDT bid $5.1 billion for parts of WorldCom Inc. shortly after that company filed for bankruptcy amid its accounting scandal, and announced interest in parts of Global Crossing.
The deal in which Global Crossing agreed to be bought by Hutchison Whampoa, which is controlled by Hong Kong billionaire Li Ka-shing, was disclosed a year ago and approved by a bankruptcy judge in August.
At the time, Rep. Dana Rohrabacher, a California Republican, complained to President Bush and the military about Li's ties to the Chinese government and said it should disqualify him from owning fiber-optic networks in the United States.
A spokesman for the U.S. Treasury Department did not return a call late Monday seeking comment about its review of the Global Crossing deal.
Jonas said IDT would have bid for Global Crossing sooner, but its board was largely distracted by corporate governance issues stemming from last year's business scandals and expected other U.S. telecom companies to step in with bids.