Copyright 2002 Gannett Company, Inc.

USA TODAY…03/04/2002

From LexisNexis

An investment firm that's turned around such technology firms as The Learning Company and VeriFone plans to submit a bid as soon as this week for what could be its biggest acquisition — troubled Global Crossing.

Gores Technology Group intends to file a bid in U.S. Bankruptcy Court that would trump another offer for the fiber-optic giant from a partnership of two Asian investment companies, say sources close to the deal. No specifics were offered.

Hutchison Whampoa of Hong Kong and Singapore Technologies Telemedia have proposed investing $750 million under a deal that would give them a majority ownership stake in the reorganized company.

Global listed $22.4 billion in assets and $12.3 billion in debt when it filed for bankruptcy protection last month. It was the largest telecom bankruptcy ever.

Gores, under founder Alec Gores, specializes in salvaging tech-based companies. Though it has acquired 35 companies since 1992, Gores didn't attract much attention until it acquired children's software maker The Learning Company from Mattel two years ago.

The Learning Company had become a disaster for Mattel, which paid $3.8 billion for it in 1998 under then-CEO Jill Barad. Gores picked it up under an arrangement in which it invested little, but splits profits and the gains from any future sale with Mattel.

Likewise, Gores bought VeriFone, a company best known for the terminals that verify credit card transactions in stores, from Hewlett-Packard last year. It reported in November that it had made VeriFone profitable within 100 days.

Gores makes its acquisitions from executive offices in Los Angeles. Its operations team, based in Boulder, Colo., typically swoops in to run newly acquired companies until they are back on their feet.

A Gores spokesman had no official comment on the report of interest in Global.

Global spokesman Dan Coulter, reading from a statement, declined comment about a prospective Gores offer. He added that Global believes any buyer should keep the company's major assets intact, including its broadband communications network. Global's executive offices are in Beverly Hills.

Hutchison and Singapore Technologies couldn't be reached.

Global Crossing, which filed for bankruptcy protection Jan. 28, is the subject of probes by the Securities and Exchange Commission and the FBI.

Questions center on its methods of booking revenue in transactions between carriers. A former finance executive alleged Global used "sham" swaps to inflate revenue, which misled investors, an allegation company officials have denied.

Global, which operates a 100,000-mile fiber-optic network, said last week that it expects to report a significant loss for the fourth quarter and fiscal 2001, including charges and write-downs of at least $11 billion. It has one-fifth of the fiber-optic cables from the USA, linking to 200 cities around the world.