Vodafone heads race for AirTouch

NEWS The race to capture much-coveted US mobile operator AirTouch is far from over, but UK-based Vodafone seems to be emerging as the favourite. Some press reports - citing unnamed sources - are already referring to the birth of a new company called VodaTouch. Vodafone announced this morning that its initial bid remains unchanged. It is rumoured to be willing to pay $54bn for the company, against the $43bn Bell Atlantic offered earlier this month. Increased bids remain a possibility - something that has been reflected in AirTouch's share price. Shares in the company closed at $82.87 Friday, up 19.4 per cent since 31 December when AirTouch first came under the spotlight. Late last week there was speculation that acquisitive telco MCI WorldCom was about to enter the fray, but the company issued a press release saying that it "has determined not to pursue a bid for the company at this time". Analysts had doubted whether AirTouch would fit in with the company's expansion plans. Adding further spice to the story, the UK's Sunday Times newspaper yesterday speculated that BT might consider making a play for AirTouch. However, the move is widely considered unlikely. BT has refused to be drawn on the prospect, but its presence in consortia that compete against AirTouch-backed providers in Europe, as well as its looming international tie-up with AT&T, would make such a move difficult.