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Billionaire seeks stake in XO

Tuesday, March 26, 2002 | 11:27 a.m.

SUN STAFF AND WIRE REPORTS

RESTON, Va. -- Billionaire financial and Las Vegas casino owner Carl C. Icahn has proposed buying 50 percent of XO Communications Inc. for $500 million, the Wall Street Journal reported today, citing unidentified people familiar with the matter.

Icahn, who already holds $750 million in XO bonds, had signaled he would enter the battle for control of the company two weeks ago. His restructuring plan, delivered to XO executives late Friday, sweetens a bondholder plan that was rejected by XO by giving the company enough cash to fully fund its business plan, the paper said.

Icahn will face off with Theodore J. Forstmann, whose leveraged buyout firm Forstmann Little & Co. offered in November to invest an additional $400 million in XO to increase his equity stake to 39 percent from 22 percent, the paper said.

XO is a Reston, Va.-based company, that provides Internet and phone services to midsize businesses in several markets, including Las Vegas.

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