The telecommunications sector was quiet yesterday as key stakeholders in the industry mulled over how a proposed $205 million bid for KeyTech Holdings Ltd. would impact them.

Cable & Wireless Plc, whose cable lines once spanned the British empire, made public its unsolicited offer for KeyTech Holdings on Wednesday. At the time, the proposal valued for each of the 12 million KeyTech shares was $17, however KeyTech is poised to offer a share dividend next Monday which will give every shareholder one share for every ten they own. As result of the share dilution, the Cable and Wireless offer now works out to $15.45 share.

KeyTech?s board of directors does not consider the Cable and Wireless proposal to be in the shareholders? best interest.

KeyTech shares jumped $2 or 14.8 percent to close at a record high of $15.50 yesterday on thin trading o just 100 shares. The asking price for shares jumped to $17, the same price C&W has offered.

Yesterday, Cable & Wireless Bermuda chief executive Eddie Saints said he was disappointed by their response but his company remains keen to engage KeyTech as it has from the inception of the discussion eight months ago.

?We remain intrigued as to why they feel this proposal not in interest of shareholders,? he said, adding that he is optimistic that shareholders, who are scheduled to attend KeyTech?s annual general meeting today, will put some pressure on KeyTech to look at the proposal and not treat it lightly.

At March 31 this year, there were just over 12 million KeyTech common shares of which KeyTech?s directors held just 373,141 while KeyTech executive management held a further 14,193 shares, according to the company?s annual report.

Trading on the Bermuda Stock Exchange ahead of the announcement has been normal acquiring to BSX president and CEO Greg Wojciechowski. He told this newspaper yesterday that the Exchange has already monitored and analysed trading of KeyTech going back to late last year and it has not noticed any unusual trading patterns.

?The Exchange has been in consultation with the company and the company has been following the spirit of the regulations in keeping us informed and advising the market when it had to,? he said.

The move to acquire KeyTech seems to fall in line with the UK-based Cable and Wireless Plc?s overall plans to to expand internationally as growth at home is constrained by increased competition and falling demand for traditional voice services. The company said in January that it was reorganising into two main units, one in the UK and the other to run the international business.

?The provision of a comprehensive service offering combined with Cable & Wireless? international scale and expertise will benefit both our customers and the economy of Bermuda,? said Harris Jones, Cable & Wireless?s group managing director, international.

Members of the technology sector generally abstained from comment yesterday.

Vicki Coelho, general manager North Rock Communications Ltd., said it was premature due to the comments made by the KeyTech board of directors and regulatory issues that may prevent such a merger from occurring.

As parent of Bermuda Telephone Company and Logic Communications, KeyTech competes with North Rock Communications for local and long distance service as well as Internet services.

BTC?s historic monopoly on local phone service for business has also come under pressure of late as a result of Quantum Communications. That company, which this month rolled out a new flat rate local dial telephone service in Hamilton and which also offers digital high speed internet and broadband technology, is 40 percent owned by Cable and Wireless.

While Quantum chief executive officer Austin Woods was not in position to comment on the proposal yesterday since the company was waiting to speak with the Cable and Wireless board, Mr. Saints said that if the deal goes through, it was likely that Quantum would be spun off and still continue as separate entity.

?It is one of the many issues we have to discuss in depth with Ministers,? he said adding that the proposal was not designed to lessen competition.

?This is great foundation upon which competition will be enhanced, but the key part is having the scale and scope to make investments so it truly produces a world class telecommunications infrastructure for all to benefit from,? he said.

KeyTech also competes with the Island?s mobile telephone providers through M3 Wireless. Yesterday, Kurt Eve, chairman and CEO of Bermuda Digital Communications, the parent company of Cellular One, noted that the whole reason his company and others received licenses in the mid-1990?s was because Cable and Wireless and BTC, now KeyTech, had monopolies in long distance and local telephone respectively. He said it was almost counterintuitive now to think about putting the two companies together.

?It would not necessarily be good for the competitive environment because you would have one very large competitor that would dwarf all of the rest of us,? he said.

On the international front, Cable & Wireless is a direct competitor with TeleBermuda International. Yesterday, Greg Swan, TBI?s chief operating officer said that his company views the proposal as an offer only and has noted that it has not been accepted by KeyTech nor received the necessary regulatory approvals.