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June 10, 2002 — (WEB HOST INDUSTRY REVIEW) — Troubled telecom firm XO Communications (xo.com) rejected a request by Forstmann Little & Co. and Telefonos de Mexico Friday to rescind an offer the companies had made to buy the firm.
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Forstmann, an investment firm, and Telefonos de Mexico, a Mexico-based provider of telecommunications services, each agreed to contribute $400 million last November to purchase approximately 80 percent of XO, which provides broadband communications and Web hosting services.
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However, XO has yet to approve the plan, which has since seen a counter-offer from high-profile investor Carl Icahn.
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“We do not believe that the investors have any right to terminate their obligations unilaterally, and see no reason to believe that the closing conditions cannot be satisfied,” XO said in a statement. “However, if for any reason the Forstmann Little/TELMEX agreement fails to close for any reason, it is important to note that in recent weeks XO has made substantial progress with the steering committee of its senior secured lenders to formulate a standalone plan which would come into effect in that event.”
