Financial Times indicates FT interested in buying Global One:
MCI WorldCom confirms $115bn Sprint takeover
By William Lewis and Richard Waters in New York
Bernie Ebbers, chief executive of long-distance carrier MCI WorldCom, yesterday confirmed his company's $115bn (œ70bn) takeover of Sprint and launched a scathing attack on European telecommunications groups which he said were lagging behind fast-developing US telecoms giants. The merger will create the world's largest telecoms company.
Mr Ebbers said he planned to ditch long-distance carrier Sprint's Global One international alliance with Deutsche Telekom and France Telecom immediately and continue MCI's push into the European markets alone. "Our network in Europe will look just like the network in the US," he said.
The US telecoms industry has seen frenzied merger activity in recent months, while the European market has remained dominated by former state-owned monopolies. Mr Ebbers warned: "Most of the companies in Europe would not be survivors in a transaction [between US and European telecoms companies]."
National sensitivities in Europe, however, meant such deals were unlikely for some time, he added. "If you bought Deutsche Telekom today you would be buying the German government, not a telecoms company."
William Esrey, Sprint's chairman and chief executive, said that Global One was likely to be bought within two months by one of Sprint's two European partners. In recent days Deutsche Telekom and France Telecom, both 10 per cent shareholders in Sprint, have fought against an MCI takeover, instead backing a BellSouth bid for Sprint.
However, late on Monday Sprint's board decided to back a raised MCI bid, and yesterday BellSouth confirmed it would not challenge MCI's $76 a share offer.
In response, Deutsche Telekom said yesterday it planned to sell its Sprint stake. France Telecom would only confirm that Global One "will have to undergo a change in its ownership structure given that its activities compete with those of MCI WorldCom". People close to France Telecom said it was keen to acquire Global One.
Following MCI's takeover of Sprint, the largest merger or acquisition in history, Mr Ebbers is set to emerge at the helm of the company with a market capitalisation of approximately $230bn.
In New York, MCI's stock price fell 5.14 per cent to close at $67 15/16, largely on investors' concerns about the price. Sprint's share price fell $2 to close at $58 7/8.
Salomon Smith Barney advised MCI and Warburg Dillon Read advised Sprint.
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