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Austar wants Optus’ broadband network

Feevee operator also winks at Murdoch

SYDNEY — UnitedGlobalCom’s rural Australian feevee operator Austar has confirmed that it is in talks to acquire part or all of the broadband cable network of urban feevee operator Cable & Wireless Optus.

Austar, which analysts believe has become more aggressive since John Malone took a controlling interest in Gene Schneider’s UnitedGlobalCom, is keen to expand into urban Oz markets.

It is also considering an alliance with Rupert Murdoch and Kerry Packer’s dominant Foxtel feevee cabler or acquiring Mike Boulos’ A$500 million ($300 million) microwave network.

Austar stock dips

But news that Optus is asking Austar for $1.5 billion for a half-share of its cable, which reaches 2.2 million homes, sent Austar shares tumbling almost 10% amid fears that that price is too much for Austar to pay. Indeed, the value of Oz broadband cables may decline if a pending court case upholds recent Australian Competition and Consumer Commission rulings binding cablers to grant carriage to all channel providers on fair commercial terms. Cable & Wireless is keen for partnerships — if not an outright sale — to revitalize the moribund, money-losing feevee operations of Optus.

Optus’ other suitor is thought to be Gotham-based U.K. transmission networks firm NTL, which earlier this year took over C&W’s U.K. broadband network.

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