WorldCom's MCI bid alters playing field for telecom industry; a $30 billion surprise offer would create a titan in long distance, Internet; BT officials 'don't live here.' (British Telecommunications) (Ring Leader) (Company Business and Marketing)

Article Abstract:

WorldCom has stunned the global telecommunications world with its offer to acquire MCI for $41.50 a share, or about $30 billion. The unsolicited bid would topple the pending $21 billion merger between MCI and British Telecommunications (BT). WorldCom, fourth among US long-distance carriers, would emerge as a telecom powerhouse that would hold the most network assets in long-distance, local and Internet services. BT in Sep 1997 renegotiated a 25% drop in its MCI purchase price, from $40 a share to $30 a share. BT can either improve its bid, or let the uneasy MCI deal collapse and seek a new international partner. Some question whether WorldCom, which has spent nearly $20 billion in five large acquisitions since 1994, can afford the largest takeover in US history. The US government will study the WorldCom offer's antitrust impact on the Internet and long-distance phone elements. WorldCom also announced the purchase of Brooks Fiber Properties for $2.4 billion in stock.

WCOM, MCI Inc., Company Acquisition/Merger

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BT secures its place among telecom titans with MCI takeover; the $20.88 billion deal puts concert global on course to enter new markets; marriage of Staid and Spunky

Article Abstract:

British Telecommunications (BT) has taken over MCI for $20.88 billion in the largest takeover in British history. The deal creates Concert Global Communications PLC, valued at $55 billion, only marginally smaller than $55.2-billion AT&T. The takeover stemmed from an earlier agreement between the two companies in which BT bought 20% of MCI for $4.3 billion in an agreement that gave BT the right of first refusal should any other company approach MCI with a takeover proposal. This agreement made it difficult for MCI, which has courted investors since stock performance began to flag in 1996, to deal with anyone but BT. Some analysts foresee integration problems for conservative BT and the relatively brash renegade start-up MCI. The wisdom of the deal may not become clear for five years, analysts say.

Company acquisition/merger, Concert Global Communications PLC

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