20:21 Sprint Rejects BellSouth Offer, Agrees to MCI WorldCom Buyout
Westwood, Kansas, October 4 (Bloomberg) -- Sprint Corp. ended a bidding war by agreeing to be purchased by MCI WorldCom Inc. and rejecting a bid from BellSouth Corp., people familiar with the situation said.
The vote by the Sprint board came after MCI WorldCom improved its $65 billion offer to counter an increased bid by BellSouth Corp., a person said without elaboration.
BellSouth, which provides local phone service in nine southeastern U.S. states, today sweetened its $72 billion bid for Sprint, boosting a cash bonus for Sprint's wireless unit to $11 a share, more than MCI WorldCom Inc.'s offer, people familiar with the negotiations said. Terms of the MCI WorldCom offer couldn't immediately be determined.
Sprint is partnering with a deep-pocketed rival that will allow the No. 3 long-distance carrier to compete better. The combination is one of the largest acquisitions ever.
Officials at Sprint and BellSouth declined to comment. MCI WorldCom representatives weren't immediately available for comment.
Buying Sprint would have given BellSouth, the national and international reach it lacks.
Some analysts had predicted MCI WorldCom would triumph, in part because the transaction gives Chief Executive Bernard Ebbers what investors say he needs most, a nationwide wireless network as customers demand packages of phone services.
MCI WorldCom, with $35 billion in annual sales, may have to divest Sprint's data network, just as WorldCom was forced to sell an Internet unit to gain approval of its purchase of MCI Communications Corp. in 1998, analysts said.
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