MCI To Buy Sprint In $129 Billion Deal

(no name) ((no email))
Tue, 05 Oct 1999 09:11:13 -0500

I find this very annoying. I had been a happy MCI residential long-distance
customer for many years until the end of last year. I had even tolerated
Friends and Family without complaint. After the WorldCom beast got rolling,
things went downhill quickly.

I don't make all that many long-distance calls, but when I do they tend to come
in spurts. And I have never yet called LD from a cell phone.

So the first annoyance was when WorldCom let me know that, although they were
going to start charging me $5 a month to not make any LD calls ($7 by the time
the taxes are included), because they were so happy to have me as a loyal
customer, they would let me skate for 3 whole months. What a deal. Then they
started charging me $3 a month to not make LD calls on my cell phone, (I only
had one at the time), and via a separate bill, too, not billed through Cellular
One, so I'd have the pleasure of writing that extra check for $5 (with taxes).
A quick call to C-One to change from MCI to No Designated Carrier fixed that.
The last straw was when my January bill came. I had made 2 lengthy calls on
Christmas day, which being a Friday, and thus a regular prime time business
day, they billed at 28 cents/minute.

So I quickly became a customer of AT&T, and they even paid me $50 to switch.
One Rate-Online, 9 cents/minute, any time, any day, no monthly fee or minimums,
billed automatically with 20 days of float, email notification, bill online.
You can also get 7 cents/minute for an extra 4.95 per month, but I don't call
nearly often enough to make that pay.

Since the kids are getting older and more mobile (16 and 14), another cell
phone became very useful, and the smaller amd lighter the better. The best
deal I could find at the time was with Sprint, the Samsung PCS with the Sprint
logo. Nice size and very light. Fees have been reasonable, and there's no
roaming charges in certain areas of the country, which just happen to include
the main places I ever travel (LA and Denver). But now WorldCom has stuck
their ugly mugs in the door again (HI! REMEMBER ME?), and I'm fearing an
imminent loss of gruntlement. The happy thought in all of this is that
WorldCom marketing types are so inept they can't have much chance to breed.

Next up, Ma Bell buys Ameritech, my local phone company. The fun never stops.


And way down below in the sunbelt
and the telephones, and the telephones, and the telephones,
and you look out the moon where the window is
every day in the morning when you get up
and you crawl out of bed.

Jack Gets Up, Leo Kottke, My Father's Face


NEW YORK (Reuters) - MCI WorldCom Inc. (Nasdaq:WCOM - news), the second-biggest
U.S. long-distance company, Tuesday said it would buy No. 3 carrier Sprint
Corp. (NYSE:FON - news) in a deal valued at $129 billion, by far the biggest
corporate takeover ever.

The combined company, to be called WorldCom, would have about 30 percent of the
$90 billion U.S. long-distance market and create a huge rival to market leader
AT&T Corp. (NYSE:T - news) .

MCI WorldCom muscled aside a last-gasp bid for Sprint from BellSouth Corp.
(NYSE:BLS - news), the dominant local telephone company for the southeastern
United States.

MCI WorldCom said in a statement it would pay $76 in stock for each Sprint
share. Clinton, Miss.-based MCI WorldCom said each share of Sprint's wireless
unit, Sprint PCS Group, would be swapped for one new WorldCom PCS tracking
stock and 0.1547 share of MCI WorldCom common stock.

The exchange ratios give the stock portion of the deal a value of $115 billion.
MCI WorldCom also will assume $14 billion in debt and preferred stock, giving
the deal an overall value of $129 billion, the company said.

At that price the deal dwarfs all others to date. That includes oil giant Exxon
Corp.'s (NYSE:XON - news) planned $80 billion purchase of rival Mobil Corp.
(NYSE:MOB - news) and the $72 billion deal pending between regional phone
companies SBC Communications Inc. (NYSE:SBC - news) and Ameritech Corp.
(NYSE:AIT - news) .

Shares in Westwood, Kan.-based Sprint closed Monday at 60 on the New York Stock
Exchange. They were up at 63-1/2 in pre-opening trade on the Instinet
electronic broker system. MCI WorldCom's offer represents a 27 percent premium
over Monday's closing price.

MCI WorldCom slipped to 68-3/8 from a close of 71-10/16.

MCI WorldCom had wanted Sprint to gain its long-distance service and especially
to fill its need for a wireless system. Sprint's fast-growing wireless network
covers about 180 million Americans.

``WorldCom will have the capital, proven marketing strength and
state-of-the-art networks to compete more effectively against the incumbent
carriers domestically and abroad,'' MCI WorldCom President and Chief Executive
Bernard Ebbers said.

MCI WorldCom said the boards of the two companies had approved a definitive
agreement to merge.

The deal is expected to close in the second half of next year and is not
expected to hurt WorldCom's earnings per share, the company said.

When the merger is completed, Sprint Chairman and Chief Executive William Esrey
will become WorldCom chairman. MCI WorldCom's Ebbers will become president and
chief executive of the combined company.

In a separate statement, Germany's Deutsche Telekom AG (NYSE:DT - news) said it
would sell its 10 percent stake in Sprint for about $9.2 billion.

France Telecom (NYSE:FTE - news) also holds a 10 percent stake in Sprint.

The deal may face rigorous regulatory scrutiny.

SBC, whose deal for Ameritech is being reviewed by regulators, said in a
statement that it expected regulators to ''bring equal vigor and zeal to
reviewing the MCI WorldCom-Sprint merger as they have other transactions.''