|
WorldCom ups MCI bid
|
 |
November 10, 1997: 6:20 a.m. ET
Upstart telecom company bests GTE by hiking offer 20 percent, says report
|
NEW YORK (CNNfn) - WorldCom Inc. Sunday night hiked its bid for MCI Communications Corp. by 20 percent to about $36 billion, forcing rival GTE Corp. to quickly consider its options, according to published reports.
Sources close to the talks say an agreement could be reached by later Monday, according to The Wall Street Journal. The two companies boards met for much of Sunday to discuss the new offer, which equals $50 a share, up from its previous $41.50 bid.
WorldCom would have to issue more shares in the acquisition under its renewed offer. It is not known whether the new bid would include a cash purchase of British Telecom's 20 percent MCI stake.
Sources tell the newspaper they expect GTE to hike its previous $28 billion cash bid in an effort to win MCI's assets, which in addition to long distance, also include local phone and Internet access.
It not clear whether WorldCom's $50 offer would still be accretive to earnings. WorldCom said its original $41.50 a share bid would hike earnings as much as 22 percent if purchase accounting was used.
WorldCom could likely also make the transaction accretive to earnings even at $50 a share if pooling came into play. At $50 a share, British Telecom would gain about $2.5 billion above its original investment, excluding the breakup fee.
One uncertainty in the deal is the role British Telecommunications will play. It was the first to offer to acquire the remaining shares of MCI it didn't own. That deal, announced a year ago, angered MCI management and opened the door for others to make bigger offers.
|
|
|
|
|
 |
|
