MCI ponders Orange move
BY CHRIS AYRES, MEDIA BUSINESS CORRESPONDENT
MCI WorldCom, the US telecoms group, was last night considering whether to gatecrash takeover talks between France Telecom and Orange, the UK mobile phone company.
Orange has been put up for sale by Vodafone AirTouch, which inherited the mobile operator when it bought Germany's Mannesmann. Talks between Vodafone and France Telecom are at an advanced stage, with Orange joining the negotiations early this week.
Many believe that preliminary terms for a cash and shares deal - comprising œ20 billion in cash and up to œ10 billion in paper - could be announced at Vodafone's annual results on Tuesday.
However, MCI is thought to have hired Salomon Smith Barney to advise it on launching a rival deal. Because MCI pulled out of the auction for UK third-generation mobile licences at an early stage, and because it is having regulatory difficulties in Europe over its merger with Sprint, analysts have doubted its commitment to buying Orange.
Yet Bernie Ebbers, the MCI chief executive, has repeatedly said that he wants a mobile phone operation in Europe. He is thought to believe that Orange represents a "once in a lifetime opportunity".
Another likely bidder for Orange is KPN of The Netherlands. The company is one of the best funded mobile operators in Europe, with backing from Japan's NTT DoCoMo and America's Bell South. KPN has already gazumped France Telecom once by buying Germany's E-Plus.
Orange's management, led by Hans Snook, is thought to be more interested in working with either MCI or KPN than with France Telecom.
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