Last month we learned that Indonesia's PT Telkom was looking seriously at a bid for Pacnet. Then Pacnet sent CEO Bill Barney packing in a surprise move alongside rumors that he had differed with the company's private equity owners on a sale. It looked like PT Telkom was all set to gobble up the regional submarine cable operator, but apparently it was not to be.
Reports this morning quote a Telkom representative unequivocally canning the idea, saying "We cancel our plan to buy Pacnet because it doesn’t bring added value to the company" which doesn't sound much like a new negotiating position. In many ways a merger of PT Telkom and Pacnet made more sense than other potential combinations due to the regional fit, but there are others out there. If the Pacnet's private equity backers have had enough, then who might they look to next?
My first guess would be NTT, which has made much out of its purchase of PC-1 and could take this opportunity to beef up its overall regional assets. Another Asian-based possibility could be Tata Communications, which we know is at least looking given their attempt at C&W Worldwide. And a third possibility would come from China, as China Telecom itself kicked the tires a few years ago but didn't pull the trigger.
Perhaps the US-based option would be Level 3, which could become interested in adding Asian reach and scale to its global footprint now that it has the scale it needs in the US to balance its debt. If the price were right, I'm sure they'd consider it. But maybe not for a couple of quarters yet.
Any other serious possibilities out there?