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MCI sells News Corp. stake
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April 6, 1999: 3:53 p.m. ET
Telecom giant, out of satellite deal with Murdoch's empire, to focus on core biz
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NEW YORK (CNNfn) - Telecom powerhouse MCI WorldCom Inc. said Tuesday it would sell $1.39 billion in stock of media empire News Corp. to focus on its communications business.
The sale comes four years after MCI first bought that slice of News Corp., controlled by media mogul Rupert Murdoch, for $1.35 billion.
Officials at MCI WorldCom, which was formed last year, said the company wants to focus on telecom -- not media or content.
"What you can read into it is that we are focusing on the core parts of our business," said MCI spokesperson Jamie DePeau. "We are going to take that money and reinvest it into the high-growth parts of our business -- such as Internet, international and data [operations]."
The MCI WorldCom divestiture is an outgrowth of a digital satellite broadcasting venture with News Corp. called ASkyB that the companies agreed to sell to EchoStar (DISH) for stock late last year.
"[The alliance] didn't work, so let's move on," said John Tinker, a media analyst with NB Montgomery Securities, describing the mindset behind the divestiture.
The sale of the News Corp. shares is in line with a policy laid out by Bernie Ebbers, MCI WorldCom Chief Executive, to concentrate on the telecom business.
And that policy may be a sign MCI will want to quickly sell EchoStar stock upon regulatory approval of the sale. Approval by the Federal Communications Commission awaits.
Shares of MCI WorldCom (WCOM) climbed 2-13/16 to 89-11/16, while the American depositary receipts of Australia-based News Corp. (NWS) edged up 3/16 to 34 in the wake of announcing Tuesday it would purchase Liberty Media Group's 50 percent interest in Fox/Liberty Networks.
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MCI WorldCom
News Corp.
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