NEW YORK (AP) _ Billionaire John Kluge plans to sell his entire stake in the nation’s fourth largest long-distance telephone company, WorldCom Inc., it was announced today.
The stake which Kluge owns through his Metromedia Co. was valued at more than $920 million, based on its closing stock price Friday before the deal was announced. It represents about 16.3 percent of WorldCom’s outstanding stock. Metromedia is WorldCom’s biggest shareholder.
The 80-year-old Kluge said in a statement that the decision to market the stake in WorldCom ``reflects my personal estate planning, as well as our longstanding investment philosophy of not holding minority interests for the long-term.″
He expressed support for the company’s current management led by Bernard Ebbers, president and chief executive of WorldCom.
Ebbers said WorldCom expects to continue to capitalize on the explosive growth in the telecommunications industry and from changes in the regulatory environment.
The almost 30.9 million shares will be sold via an underwriting by the investment firm Donaldson, Lufkin & Jenrette Securities Corp.
WorldCom closed at $30.12 1/2 a share in trading Friday on the Nasdaq Stock Market, near its 52-week high of $32 a share. But in early trading today, after the deal was announced, WorldCom tumbled $1.87 1/2 to $28.25.
Kluge said he would remain as chairman of WorldCom, and said he and two colleagues elected to the WorldCom board as a result of Metromedia’s stake in it _ Stuart Subotnick and Silvia Kessel _ would remain as directors of the phone company.
WorldCom, which is based in Jackson, Miss., was created in 1993 by the combination of telecommunications providers LDDS Communications, Metromedia Communications Corp. and Resurgens Communications Group Inc.
It ranks as the fourth-largest long-distance provider behind AT&T Corp. MCI Communications Corp. and Sprint Corp.
Kluge is one of the world’s richest men, and has wide-ranging interests in the restaurant, entertainment, broadcasting and medical technology businesses.