Wholesale provider Teleglobe International Holdings Ltd. said today it has agreed to be acquired by Indian provider Videsh Sanchar Nigam Limited (VSNL). VSNL will pay $239 million for Teleglobe.
Teleglobes board of directors has approved the transaction, which should close in the next six to eight months.
Reuters India reported VSNL officials said today the deal makes their company the third-largest international wholesale voice provider, behind AT&T Corp. and MCI Inc.
“After evaluating this and other expressions of interest received over the past several months, our board of directors accepted VSNL’s bid as a means of delivering immediate value to shareholders at a significant premium to recent public trading prices, said Liam Strong, president and CEO of Teleglobe, in a news release.
This strategic transaction creates a highly complementary combination of Teleglobe’s extensive wholesale Voice VoIP/TDM network, Global Tier 1 IP Network, and deep customer base with VSNL’s integrated telecom services to strengthen our position as a leading global telecom provider, added N Srinath, director on the board of VSNL.
Morgan Stanley acted as exclusive financial advisor to Teleglobe, and gave a fairness opinion to Teleglobe’s board of directors regarding the buyout. Standard Chartered served as financial advisor to VSNL. Schulte Roth & Zabel, LLP acted as Teleglobe’s legal counsel, and Kelley Drye and Warren served as counsel to VSNL.