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Shareholders have been inquiring, through many calls and emails, about CIRI's wireless telephone investments and the recent developments surrounding the sale of our partner, VoiceStream Wireless Corp. Many shareholders are asking whether CIRI will be paying a large special dividend soon.
In my two letters to shareholders, and previous messages in the Shareholder Update, I have tried to explain the process we must go through before the gains from our wireless investments can be realized and be available for possible dividends.
We have recently made great strides in speeding up that process, but even today there are still steps we must go through before the value of CIRI's investments can be accessed.
On July 24, 2000, VoiceStream announced it had signed an agreement to be acquired by international giant Deutsche Telekom. Under the terms of the transaction, VoiceStream shareholders will receive 3.2 shares of Deutsche Telekom and $30 cash for each share of VoiceStream. The value of this deal for VoiceStream shareholders will move up and down with the price of Deutsche Telekom shares.
There are significant regulatory and political hurdles to overcome before this transaction can close. For example, some in Congress are seeking legislation to prohibit companies owned 25 percent or more by foreign governments from
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owning a U.S. communications
company like VoiceStream. Deutsche
 Telekom
is more than 25 percent owned by the German government.
VoiceStream and Deutsche Telekom believe it will be a difficult fight to overcome the regulatory and political hurdles but have strategies to do that. However, it could be nine to twelve months or longer before we know whether the transaction will be concluded.
If the VoiceStream/Deutsche Telekom transaction closes, CIRI's shares in VoiceStream will be exchanged for Deutsche Telekom shares and cash, just like the shares of other VoiceStream shareholders. We will not know the final value of the transaction for CIRI until the closing.
If the VoiceStream/Deutsche Telekom transaction does not close, CIRI will still own approximately 8.14 million shares in VoiceStream. The value of these shares could be lower if the transaction does not close, although our return on investment would still be very good.
Whether or not
the VoiceStream/Deutsche Telekom transaction closes, CIRI's VoiceStream
shares could still be sold in the market, although it could be four
to six months or so before we have the ability to do that. Whether or
not to sell shares at that time would be a decision for the CIRI Board
of Directors. If CIRI had its shares today, they would be worth more
than $1 billion.
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