Telecom bid for Optus still alive

Telecom denied yesterday an Australian report that it was virtually out of the race to buy Cable & Wireless Optus' mobile assets.

The Australian Financial Review business daily said the Optus race was likely to become a two-horse affair after Telecom conceded it was unlikely to win its bid.

Singapore Telecommunications is reported to be prepared to make a full-cash offer for the whole of Australia's No 2 phone company.

But Telecom spokesman Martin Freeth said yesterday Telecom did not consider itself out of the running.

"We remain interested and we are still talking to C&W Optus.

"We confirm that we remain interested in the restructuring of C&W Optus as part of our strategy for growth in Australia.

"We are continuing to talk with C&W Optus in the context of the sale process which they initiated in December.

"There is a lot of water to flow under the bridge."

But Telecom was interested only in Optus' mobile assets, where an acquisition would enhance value.

"It will ultimately be a question of what the price is and we take a view of that."

The AFR quoted sources close to Telecom saying the company could not compete with the financial firepower of SingTel and Vodafone.

"We know SingTel is looking to use cash," a person close to the Telecom was quoted as saying.

"We have always believed that if someone else comes along with a full cash offer then they will be successful," the Telecom source said.

AFR reported that the "concession" from the Telecom camp came amid reports SingTel was preparing a full-cash, on-market bid for Optus.

It said Telecom was now re-examining a number of alternative ways of expanding into the Australian market.

Sources close to the third interested party, Vodafone, confirmed the world's largest mobile had failed to secure an explicit agreement from C&W not to support an on-market bid from SingTel.

- NZPA