Qwest Weighs Bid for Cable & Wireless Hosting Unit

Qwest is considering an offer for the U.S. hosting assets of Cable & Wireless, and has asked a bankruptcy court to extend the bidding deadline for three days, from today until Tuesday. Qwest's court filing mentions "a number of other bidders" in addition to Gores Technology Group, which has agreed to buy the U.S. operation for $125 million.

Qwest wants more time to evaluate customer contracts, saying delays in gaining access to documents have left it at a disadvantage to Gores and other suitors. Koch Data Centers LLC made a similar filing, also seeking an extension until Tuesday.

The filings confirm reports that numerous parties are weighing bids for Cable & Wireless America (CWA), which was placed in Chapter 11 protection Dec. 8 as part of the sale agreement with Gores, a California investment firm. Other reported suitors include Level 3 Communications, WilTel Communications, Oaktree Capital Management and Cerberus Capital Management.

The court set a deadline of 5 p.m. today (Jan. 16) for bidders to submit offers, with an auction scheduled to follow on Tuesday. Qwest and Koch each want to be given until 5 pm on Tuesday (Jan. 20) to submit bids and gain a seat at Wednesday's auction. It was not immediately clear when the court would rule on the extension requests.

Qwest's interest in acquiring CWA's hosting assets comes barely a year after a major downsizing of its own hosting unit. In December 2002, Qwest said it would shutter or sell eight of its 16 data centers.

C&W announced its intention to exit the US hosting market back in June, and has since closed eight US data centers and reduced staffing by 1,000 workers, cutting costs by $167 million (100 million pounds) from the second half of 2002.