Aug 27, 2001 12:00 PM,

New Company Seeks to Acquire Teligent Assets

Jim Barthold

Teligent Acquisition Corp. [TAC] has been formed to buy the domestic core business assets of fixed broadband wireless provider Teligent Inc., and has made a $115 million bid for those assets. TAC plans to continue providing wireless communications for small and medium-sized businesses.

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Should the bid be successful, Teligent COO Jim Continenza, who helped form TAC, would take over the new company as CEO. The new company would retain Teligent’s senior management team – with the exception of naming a new CFO – when the deal closes probably in the fourth quarter of this year, the company said.

Stuart Kupinsky, Teligent’s general counsel, emphasized that the TAC bid is not a classic management buyout, despite Continenza’s participation.

“It’s not an internal group forming the company,” Kupinsky said.

Instead, he said, TAC is a new company under the leadership of a key Teligent executive. It does not aim to take over all of Teligent’s assets, but will focus primarily on the domestic fixed wireless business and assets, including large operations in Boston, Chicago, Cleveland, Dallas, Hartford, Houston, Los Angeles, New York, Philadelphia, Phoenix and Washington, D.C.

The acquisition bid is complicated by Teligent’s status in Chapter 11 bankruptcy, from which the company has been seeking investors or companies interested in acquiring its business and assets, including the international business, in which TAC has shown no interest.

“We have signed a pretty sophisticated asset purchase agreement with them,” Kupinsky said. “We also, at the same time, filed a series of motions that prescribe bidding procedures and auction procedures for an upcoming auction at which TAC will be the stalking horse bidder – the initial bidder that everyone else is competing with for the assets prescribed by the purchase agreement.”

Teligent – and TAC – declined to make available officials from the new company because of Continenza’s relationship with Teligent and the status of the bid, Kupisnky said.