West LB ‘cans bid’ for BT phone network
Earthlease on its tod
German investment bank West LB has decided not to proceed with the £18 billion bid for BT's landline phone network.
According to the Times, those working on the bid have been "stood down" and shunted to another team working on a multi-billion pound bid for failed UK rail infrastructure outfit Railtrack.
West LB's decision means that Earthlease - a consortium led by Babcock & Brown and Chancery Lane Capital - is free to pursue its bid for BT's local loop.
Last month it was reported that West LB was prepared to increase its offer to £20 billion once BT had successfully completed its floatation of its mobile phone business, mmo2.
This coincided with claims that Earthlease was also preparing to increase its bid for the copper wires that link homes and businesses to the phone network.
However, ever since these bids for BT's networks were made public back in the summer BT has consistently said - in public at least - that it is not interested in flogging the family silver.
Pierre Danon, the CEO of BT Retail, told The Register: "I consider the local loop as absolutely the core business of BT.
"And if there is one thing you don't do, you don't outsource your core business. That is the most stupid thing you can do." ®