WORLDCOM AIMS FOR SKY WITH MCI; UPSTART MAKES BID FOR TELEPHONE GIANT.Byline: Mark Landler Mark Aurel Landler (born October 26, 1965 in Stuttgart, Germany[1]) is an American journalist who has been the European economic correspondent of The New York Times, based in Frankfurt, Germany, since July 2002[2]. The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Barging in on a grand trans-Atlantic telecommunications alliance, an upstart long-distance telephone company Wednesday made an unsolicited offer to buy MCI Communications This article is about MCI before it merged with WorldCom. For other uses, see MCI. MCI Communications was an American telecommunications company that was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony and Corp. for $30 billion in stock. The upstart, Worldcom Inc., hopes to scuttle a merger agreement between MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. , the nation's second-largest long-distance company, and British Telecommunications. And with a bid that's $9 billion richer than the existing offer, analysts said Worldcom stands a good chance of snatching MCI from Britain's flagship national carrier. Worldcom, based in Jackson, Miss., has grown from obscurity into the nation's fourth-largest long-distance company, as well as a leading carrier of Internet traffic Internet traffic is the flow of data around the Internet. It includes web traffic, which is the amount of that data that is related to the World Wide Web, along with the traffic from other major uses of the Internet, such as electronic mail and peer-to-peer networks. , through a relentless series of acquisitions in recent years. But swallowing MCI would be a breathtaking gulp, even for a company that has made a sport of buying bigger competitors. Still, whether or not the deal goes through, the strategy behind it is stark evidence of how the telecommunications industry is shedding old distinctions - local vs. long distance, voice traffic vs. data transmission - like so much vestigial ves·tig·i·al adj. Occurring or persisting as a rudimentary or degenerate structure. skin. Worldcom's goal is to become the industry's first one-stop shop One-Stop Shop A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also to create the opportunity for the company to sell more products to clients and customers. , offering all these services in a seamless package, with an emphasis on serving business customers. ``Worldcom is at the forefront of an unstoppable trend toward very large, vertically integrated companies,'' said Daniel Reingold, an analyst at Merrill Lynch & Co. The proposal, which was made in a phone call Wednesday from Worldcom's chief executive, Bernard J. Ebbers, to MCI's chairman, Bert Roberts Jr., left even the most deal-jaded executives aghast. It would rank as the largest takeover in American history. And it is the first unsolicited bid for a phone company since the passage of the new communications law in early 1996, which opened the door to the kind of cowboy capitalism in which Ebbers and Worldcom specialize. Worldcom, offering a 41 percent premium over MCI's share price at the opening of the stock market Wednesday, is clearly betting on the restiveness res·tive adj. 1. Uneasily impatient under restriction, opposition, criticism, or delay. 2. Resisting control; difficult to control. 3. Refusing to move. Used of a horse or other animal. of MCI's shareholders. Those investors were recently asked to accept a 20 percent reduction in the price British Telecom would pay for MCI after MCI forecast unexpectedly high losses in its nascent local telephone business. Several analysts predicted Wednesday that MCI would be hard pressed not to accept the higher offer from Worldcom, which would pay the equivalent of $41.50 for each MCI share. As if Worldcom's bold bid for MCI weren't enough, the company also announced Wednesday that it has also agreed to buy Brooks Fiber Properties for $2.4 billion. Brooks is one of the largest providers of what's known as bypass service - local communications service provided to business customers as an alternative to the local telephone company - and has networks and switching equipment in 44 mid-size cities. Worldcom is also a leader in bypass services, and together the two companies have local networks in 86 large and mid-size metropolitan markets. WORLDCOM CALLS OUT TO MCI WorldCom Inc. has made a hostile offer to buy long distance telecommunications rival MCI Communications Corp. for nearly $30 billion, off-setting a bid from British Telecom. WORLDCOM INC. Headquarters: Jackson, Miss. History: In 1995, changed name from LDDS See WorldCom. Communications. Employees: About 13,000 Business: Fourth-largest long distance company; customers are predominantly corporations. Last month, WorldCom agreed to buy CompuServe for $1.2 billion, then divided it with America Online. MCI Headquarters: Washington, D.C. History: In 1971, became the first company authorized by the FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. to compete against AT&T in the long distance market. Employees: About 55,000 Business: Currently the second largest long distance company. WorldCom's strategy Offering $41.50 worth of its stock for each MCI share; this moves out British Telecom's offer last November of $34.15 a share. If successful, the WorldCom / MCI combination would be the nation's second largest telecommunications company behind AT&T. BIG DEALS Top U.S. corporate mergers if WorldCom Inc. completes its acquisition of MCI Communications Inc., showing target name, acquirer name, value in dollars unadjusted for inflation: 1. WorldCom Inc. offers to buy MCI Communications Inc. for stock valued at about $29.3 billion, announced Oct. 1, 1997, in competition with an earlier $24 billion merger agreement between MCI and British Telecommunications PLC. 2. Bell Atlantic Corp. combines with Nynex Corp. in an exchange of stock valued at $25.6 billion, completed Aug. 14, 1997. 3. RJR Nabisco Inc., merger with Kohlberg Kravis Roberts Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. It was founded in 1976 by Jerome Kohlberg, Jr., and cousins Henry Kravis and George R. & Co., $25 billion, completed in 1989. 4. Walt Disney Co. buys Capital Cities/ABC for $19 billion in cash and stock, completed in 1996. 5. SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications Inc. buys Pacific Telesis Group for $16.7 billion in stock, completed April 1, 1997. 6. Boeing Co. acquires McDonnell Douglas Corp. for $16.3 billion, completed July 31, 1997. 7. Wells Fargo & Co. buys First Interstate Bancorp First Interstate Bancorp was a bank based in the United States that was taken over in 1996 by Wells Fargo. It was headquartered in Los Angeles. The name has continued to be used in the banking world by used after the merger by First Interstate Bank who had been using the for $14.2 billion, completed in 1996. 8. Warner Communications Inc. merger with Time Inc., $14.11 billion, completed in 1990. 9. Kraft Inc., merger with Philip Morris Inc., $13.44 billion, completed in 1988. 10. Gulf Corp., merger with Standard Oil Co. of California, $13.4 billion, completed in 1984. CAPTION(S): 2 Photos, 2 Boxes PHOTO (1--color) Bert Roberts Jr. MCI chairman (2--color) Bernard J. Ebbers WorldCom CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. BOX: (1) WORLDCOM CALLS OUT TO MCI (see text) SOURCES: News reports, MCI, Worldcom; research by Kerry G. Johnson Kerry G. Johnson is an African-American graphic designer, caricature artist and humorous illustrator. He was born in Nashville, Tennessee on September 30, 1966. He attended Hillsboro High School, Columbus College of Art and Design and The Ohio State University in Columbus, . Knight-Ridder Tribune Graphics Network (2) BIG DEALS (see text) |
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