WorldCom Steps Up MCI Bid Campaign
NEW YORK (AP) _ WorldCom Inc. on Tuesday kicked off an aggressive campaign to convince MCI shareholders to reject British Telecom’s proposed merger so WorldCom can instead buy MCI for $30 billion.
WorldCom sent 250,000 preliminary proxies to MCI shareholders, weaving in praise for its unsolicited offer from eight well-known Wall Street analysts who follow the industry.
``Don’t Just Take Our Word For It. Here’s What the Expert Financial Analysts Have Publicly Said,″ WorldCom says in introducing quotes.
WorldCom argues that its bid, made Oct. 1, is worth about $9 billion more than what British Telecom is offering. In addition, WorldCom says its offer, unlike BT’s, is structured to be tax-free to MCI shareholders.
WorldCom also contends a combined WorldCom-MCI would have far more potential to grow in the United States, particularly in markets for local telephone customers.
The company said it believes MCI shareholders will reject BT’s proposal ``based on the strong support we have received from the financial community as well as the very favorable reaction from MCI’s shareholders.″
For its part, MCI Communications Corp. is scrutinizing whether WorldCom’s proposal, all in stock, will hold its value by the time a deal is signed. BT is offering a combination of cash and stock.
MCI executives also are concerned that the regulatory review and political climate could delay the deal so it takes from nine to 12 months to complete _ longer than what WorldCom has been suggesting. Other considerations are the impact on MCI’s customers and employees.
WorldCom, based in Jackson, Miss., is asking MCI shareholders to vote down BT’s offer when it comes up for a vote near the end of the year. A date has not yet been set.
A final WorldCom proxy will be mailed out in the next few weeks.
MCI, based in Washington, D.C., has 47,000 registered shareholders, but many others indirectly own MCI stock through Wall Street brokers.