Upstart offering $30 billion to buy MCI, using stock; deal would set record; A surprising bid by Worldcom seeks to scuttle an accord with a British concern

Article Abstract:

Worldcom has offered to acquire MCI for $30 billion in stock. The unsolicited offer seeks to topple a $21 billion merger agreement between MCI and British Telecommunications. Analysts believe that Worldcom, the fourth-largest US long-distance company and a leading Internet traffic carrier, has a good chance to win MCI approval. The stunning bid continues Worldcom's effort to target primarily business customers with a full range of telecommunications services. Terms of the largest-ever US takeover would call for Worldcom to pay $41.50 for each share of MCI, the second-largest US long-distance company. British Telecom recently dropped its MCI acquisition price by 20% after MCI had predicted unexpectedly higher local telephone business losses. Worldcom also said it purchased bypass service provider Brooks Fiber Properties for $2.4 billion. Questions remain whether Worldcom, with about $30 billion in stock market value, can afford such an acquisition. No one knows whether British Telcom will make a counteroffer, of if the US Government will raise antitrust concerns.

WCOM, MCI Inc.

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Rescuing a big phone deal from oblivion: British Telecom's chairman makes fateful trans-Atlantic pledge to MCI

Article Abstract:

British Telecommunications' (BT) Chmn Sir Iain Vallance added personal drama to the company's revised acquisition of MCI now worth around $19 billion. Vallance promised MCI shareholders that he would resign if MCI rejected the revised deal, whose value is 22% less than the original $24 billion offer originally negotiated in Nov 1996. BT also promised to compensate MCI with $750 million, should the deal have collapsed. The bold BT move reportedly eased strains between the telecom giants, as insiders said Vallance convinced the MCI board to accept the new proposal. Shareholders and analysts wonder whether the revised deal will prove to be an aberration or a precedent. Executive tensions have threatened or undermined several large global telecom partnerships. BT and MCI wanted to maintain the appearance of autonomy and avoid the perception of capitulation.

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MCI posts edge over its rivals in latest long-distance volume

Article Abstract:

MCI Communications is reporting that its volume of long-distance telephone calls increased by 9.2% in 1st qtr 1995 compared with the 1st qtr of 1994, which puts the company ahead of rivals AT&T and Sprint Corp. AT&T is reporting a growth rate of 8.4% while Sprint is reporting a rate of slightly over 6%. MCI's earnings rose to $244 million, which is an increase of 16.7%, and revenues increased 10.6% to $3.56 billion. The company's share prices increased $1.125 to $22.125 while AT&T dropped 12.5 cents to $49.875 and Sprint increased 37.5 cents to $32.125. All three companies had healthy growth in both consumer and business long-distance services in the 1st qtr but MCI had the strongest growth. Analysts say that MCI's success is attributable to the company's "Friends and Family" marketing campaign.

Wired Telecommunications Carriers, Long Distance Telephone Svc, Telephone communications, exc. radio, Finance, T, Long distance telephone services, Market share, Sprint Corp., Company sales/revenue, Company sales and earnings, Long-distance telephone service, American Telephone and Telegraph Co., Company Financial Information

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