MCI holds talks on acquiring Nextel; odds of a deal put at 50% due to disagreements on price, other factors

Article Abstract:

MCI Worldcom Inc. is holding talks with Nextel Communications Inc. aimed at acquisition of the cellular services company. Nextel, with a share value of $11 billion and debt of $7.7 billion, is the last independent wireless services provider in the U.S. MCI has no wireless operations. Growth in the sales of cellular service have mushroomed and MCI's absence from the sector is considered a disadvantage. Their directors, including CEO Bernard J. Ebbers, are said not to want to dilute the value of the company's earnings with an acquisition effort. The switch of many consumers to cellular may force the company to act. Sale of Nextel would require the agreement of shareholder Craig McCaw whose family owns about 20% of the company. Nextel possesses a distinctive 'walkie-talkie' technology that allows large work groups to communicate via two way radio. They control a large portion of the loyal and profitable business market for cellular. But it has licensing for the least bandwidth of any of the large cellular companies and is expected to be the first to run out of capacity. MCI rose $3.25 to $92.50 and Nextel rose $1 to $39.625 in Nasdaq trading.

Acquisitions & mergers, Radiotelephone communications, Cellular Mobile Radio Services, Cellular and Other Wireless Telecommunications, Cellular telephone services industry, Cellular telephone services, Nextel Communications Inc., NXTL

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Investors greet MCI-Sprint deal coolly; firms' stock prices decline on fears about delays linked to regulators

Article Abstract:

MCI WorldCom Inc. and Sprint Corp. announced a $115 billion agreement to merge, making it the largest merger in history. The deal comes after long negotiations that included an unexpected bid from BellSouth Corp. at the last minute, as well as insistance by Sprint board member Michel Bon that Sprint chair and CEO William T. Esrey go back to both bidders seeking improved bids. In the end, Mr. Esrey obtained an improved offer from MCI WorldCom CEO Bernard J. Ebbers. In the all-stock deal, MCI WorldCom will buy Srpint's phone business for $76 a share, provided MCI WorldCom's stock stays between $62.15 and $80.85 a share. Holders of Sprint's PCS wireless tracking stock will get a new share of that stock plus a premium. MCI WorldCom agrees to assume $14 billion in debt, making the overall deal worth $129 billion. The newly merged company will go by the name WorldCom, but the Sprint and MCI names will still be used to identify well-knonw and long-standing brands. Telecommunications analysts think that getting regulatory approval will not be easy, and that the deal may not close until the end of the year 2000.

Long Distance Telephone Svc, Statistical Data Included, Analysis, Acquisitions and mergers, Long distance telephone services, Sprint Corp., FON

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