Northern Telecom Ltd yesterday launched what it clearly hopes will prove a knock-out bid for STC Plc, offering 317 pence a share plus a special 10 pence cash dividend and valuing the company, in which it already holds 27%, at UKP1,900m. With STC warning that profits will be sharply down this year, it will be hard for a rival to justify topping the Canadian’s price. There has been widespread speculation that Northern Telecom would want to sell off STC’s non-telecommunications businesses, in particular the cables and components businesses, but Northern says that it has no plans to sell anything immediately, and there seems no reason to believe that it won’t want to keep the cables business, which is big enough to compete on the world market – and furthers Northern’s aim to expand beyond its North American stronghold – which still accounts for 90% of its business. Details and background – page 7.
