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Sprint may cancel merger
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July 5, 2000: 4:15 p.m. ET
Long-distance carrier seen ending $129B WorldCom buyout accord
By Staff Writer Luisa Beltran
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NEW YORK (CNNfn) - Sprint Corp. is considering calling off its $129 billion merger with WorldCom Inc. and an announcement could come in the next few days or early next week, a source close to the deal said Wednesday.
The move would come after the Justice Department sued to block the merger, which caused the two companies to reconsider their options. Sprint is deciding whether to restructure the deal to appease regulators or fight to try to push the deal through. But the nation's No. 3 long-distance carrier also is considering walking away from the deal altogether, the source told CNNfn.com Wednesday.
Because of the holiday week, many key executives are unavailable to "unwind the deal," the source said. An announcement could come this week or by early next week.
Collapse of the deal would open the door for German telecom Deutsche Telekom AG, which is preparing to launch its own $110 billion bid for Sprint (FON: Research, Estimates), published reports said.
In June, Deutsche Telekom, with a war chest of nearly $100 billion, made it clear that it was on the hunt to acquire a United States telecom company.
However, a Sprint-Deutsche Telekom tie-up could face problems of its own. On Friday, 30 U.S. Senators signaled their opposition to a Sprint-Telekom merger, calling any bid by a company owned by another government contrary to U.S. law. The German government currently owns 59 percent of Deutsche Telekom.
The German telecom is also looking at Cable & Wireless Plc (CWP: Research, Estimates), a London-based telecom provider, and is close to making a $48 billion bid for the company, according to German magazine Focus Money.
Sprint and Clinton, Miss.-based WorldCom (WCOM: Research, Estimates) both declined comment. Deutsche Telekom also declined comment.
Potential partners
The end of the WorldCom-Sprint merger has spurred speculation regarding what company could acquire either Sprint or WorldCom.
 Westwood, Kan.-based Sprint is more attractive to suitors, analysts said. Through its subsidiaries, Sprint offers local, long-distance and wireless services, cable television, and nationwide voice, data and video services.
"WorldCom doesn't have the full complement and Sprint has it all," an analyst said.
Besides Deutsche Telekom, other potential overseas bidders include France Telecom SA, Telefonica SA, and Nippon Telegraph and Telephone Corp., analysts said.
Sprint stock dropped 1 to close at 53-7/16 while Cable & Wireless American depositary receipts jumped 3-3/16 to 55-5/8 on the New York Stock Exchange. WorldCom gained 3/8 to 45-1/2 on Nasdaq. 
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