Control of Optus tipped to change

SYDNEY - The ownership of the second largest telecommunications company in Australia, Cable & Wireless Optus, could be up for sale just two months after its successful stock exchange listing.

C&W Optus' parent, Cable & Wireless of Britain, is understood to be looking at a mega-merger or possibly selling off chunks, including its 53.87 per cent stake in C&W Optus, because it considers itself too small a global player, despite being valued at $61.56 billion.

Any sell-off or merger would throw its Australian subsidiary's ownership into doubt and could see the Australian group end up in French, German or even British Telecom hands.

Reports from London said Cable & Wireless had commissioned an investment banker to find a suitable partner among European and United States firms to create a œ60 billion ($185.24 billion) telco giant.

One report, in the Financial Times offshoot Sunday Business, noted that BT had rejected merging with Cable & Wireless but was interested in buying C&W Optus.
That would bring the British phone giant into direct competition with local phone monolith Telstra.

But C&W Optus yesterday shunned speculation that it was likely to be sold off separately.

"There's no substance to it. They have not been in touch with us," said a C&W spokeswoman, Kristen Meagher.

She said any telco that wanted a slice of C&W Optus would have found it a lot cheaper to buy before it floated in November.

Analysts said logical partners would be Deutsche Telekom or France Telecom.- AAP