MCI, WorldCom At 52-Wk Highs As European Officials OK Pact
July 08, 1998 11:49 AM
NEW YORK (Dow Jones)--WorldCom Inc.
(WCOM) and MCI Communications Inc. (MCIC)
stocks both hit 52-week highs Wednesday after
European regulators signed off on their proposed $37
billion merger.
The 52-week high in MCI's shares was the sixth
consecutive new mark. MCI stock has hit a new
52-week high in every trading day since June 30.
The European approval, which was expected, came
after European Union antitrust officials drove a hard
bargain with the companies, forcing MCI to sell its
Internet business so the combined company wouldn't
have too much control over the Internet's main arteries.
Regulators also are reportedly imposing conditions that
will bar MCI from trying to quickly win its Internet
customers back.
MCI hasn't yet named a buyer for the Internet business,
which could be desirable to many bidders.
Although U.S. regulators have yet to approve the deal,
the European approval was regarded by analysts as the
toughest hurdle, since European and domestic regulators
cooperated.
Antitrust concerns centered on the combined company's
share of the Internet backbone. GTE Corp. (GTE),
which lost a bidding war for MCI to WorldCom, was a
leader among those who complained that the combined
company would control enough Internet traffic to choke
competition.
GTE, Stamford, Conn., said it is pleased that the
European Commission is requiring MCI to sell its
Internet business. It said it will continue to raise concerns
with U.S. regulators about the combined company's
share of the long-distance market here.
MCI, Washington, D.C., and WorldCom, Jackson,
Miss., said in a press release that they welcome the
approval and expect to close their merger this summer.
The deal will create a telecommunications mammoth
second in size only to AT&T Corp. (T). The combined
company will have combined 1998 revenue of about
$32 billion and a powerful presence in virtually every
part of the telecommunications market with the
exception of local service to consumers.
Recently, in moderate trading MCI shares hit their latest
high of 62 11/16, before settling back to 62 1/2, a gain
of 1 5/8, or 2.7% over Tuesday's close. WorldCom
shares hit a new 52-week high earlier of 51 7/8,
surpassing the previous mark of 50 9/16, reached July
2. More recently shares were up 1 7/16, or 2.9%, to 51
13/16 in moderate trading.
-By Shawn Young; 201-938-5248 |
