GTE joins bidding for MCI, offering $28 billion in cash; richest company battle; Worldcom deal for $30 billion is still highest, but that would be all in stock

Article Abstract:

GTE made an unsolicited bid to acquire MCI for $28 billion in cash, or $40 a share. The GTE move follows Worldcom's unsolicited $30 billion in stock for MCI earlier in Oct 1997. GTE intends its offer to supplant a previous agreement in which British Telecommunications (BT) would purchase MCI for approximately $19 billion in cash and stock. A combined GTE-MCI company would have annual revenue of about $40 billion, based on 1996 figures. The company also would become the first since AT&T's 1984 breakup to establish a significant presence in the local and long-distance markets. The growing number of suitors for MCI, the second-largest US long-distance carrier, indicates the telecommunications industry's drive to consolidate. Various companies seek partners that can help them bundle all possible communications services under a single brand name. GTE ranks third among US local telephone companies, and Worldcom is an upstart telecommunications provider.

GTE Corp., GTE, WCOM, MCI Inc., Company Acquisition/Merger

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MCI deal would speed pace of current mergers

Article Abstract:

If approved by the FCC and both boards of directors at both companies, the $22 billion takeover of the MCI Communications Corp by British Telecommunications will bring to $537 billion the amount spent on corporate mergers in 1996, making it the most active merger year ever. Mergers lagged during the recession stimulated by the atmospheres of deregulation, stock market health and international competition grew to $341.9 billion in 1994 and $518 billion in 1995. Telecommunications and media industries have been especially rich merger markets, yet 60% of 1996's merger activity occurred in relatively mature industries such as retail, financial and health care industries. Earlier in 1996, Bell Atlantic acquired Nynex Corporation for $21.3 billion.

Forecasts and trends, Market trend/market analysis

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British Telecommunications and MCI unveil $20.88 billion merger agreement

Article Abstract:

British Telecommunications (BT) has agreed to buy MCI Communications Corp for $20.88 billion in a deal that ranks as the largest foreign takeover ever of a US company and the third-largest takeover in US history. an earlier agreement in which BT paid $4.3 billion for 20% of MCI and first right of refusal in subsequent bargaining with other companies allowed BT to win out over other MCI suitors that included GTE. BT shareholders will own two-thirds and MCI shareholders one-third of the combined company, Concert Global communications PLC. Some analysts fear MCI investor defection given the slower growth rate of BT. News of the deal prompted an upswing in MCI stock pricing and brisk sales of MCI call options.

Company acquisition/merger

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