Small telephone company is victim of credit squeeze; Telegroup said to entertain buyout offers
Article Abstract:
Telegroup Inc, an international telephone company, has encountered financial problems and is considering takeover offers. Telegroup is seen as a victim of a worldwide credit crunch that has caused lenders to stop financing smaller companies with uncertain prospects. Financial difficulties could become particularly acute in the telecommunications industry, where competition is fierce and capital requirements high. Telegroup's market value has declined from about $775 million in Apr 1998, to about $110 million. Revenue for the company's 3rd qtr is expected to be about $105 million. Primus Telecommunications Group Inc and IDT Corp, both of which are communications carriers, have reportedly made offers for Telegroup. Other companies that might bid for the company include Star Telecommunications Inc and Worldxchange Communications. Telegroup's shares closed at $3.25 on Oct 22, 1998, up 71.875 cents in Nasdaq trading.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1998
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In phoneland, it gets lonely at the middle
Article Abstract:
SBC Communications' $62 billion acquisition of Ameritech reflects the new international telecommunications industry trend of consolidation. Ameritech Chmn Richard Notebaert decided that his company lacked sufficient size to compete in the future market despite its more than 20 million customers. Ameritech also boasts a market value of $50 billion, revenue of $16 billion and net earnings of $2.3 billion. Many smaller companies are specializing in niche markets within long-distance or local service. Such an option is not available to larger companies such as Ameritech, whose institutional shareholders expect robust earnings growth from a long-term plan. Notebaert says the recent increase in mergers extends beyond the Telecommunications Act of 1996 to the US reaction against industry giants such as Japan's Nippon Telegraph and Telephone, Deutsche Telekom and British Telecom.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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