Here is an interesting rumour, but I don't think it would have
much of a chance getting past the regulators.
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Saturday, August 1, 1998
BCE shares take flight on merger rumors
By PHILIP DeMONT
Telecom Reporter The Financial Post
ÿShares of BCE Inc. rose, then fell back Friday, on rumors it is in
talks with merging U.S. phone carriers WorldCom Inc. and MCI
Communications Corp.
ÿBCE, which owns Bell Canada and chunks of other phone carriers, already
shares some software and traffic with MCI, and the stock rose on the
possibility of an equity swap.
ÿThe shares (BCE/TSE) rose to $63 by mid-afternoon after a report BCE is
talking with WorldCom/MCI. By the end of the day they had given up their
gains, ending at $60.90, down 90› from Thursday's close.
ÿA BCE official would say only, "we are talking with all kinds of
players." But analysts believe the discussions are more serious than BCE
is letting on.
ÿ"There's no doubt they are talking," said one analyst, who asked not to
be identified.
ÿThis week, the future of the Concert alliance, an international
telecommunications partnership of which Bell is a member, was thrown
into doubt after AT&T Corp. and British Telecommunications PLC said they
were forming a separate overseas carrier. BT was a key Concert member.
ÿBCE and MCI, the long-distance carrier recently bought by WorldCom, are
familiar with each other.
ÿThe Stentor alliance of Canadian phone companies has had a technology
and traffic trading agreement with MCI since 1993. But the two sides
have been at odds about the arrangement, making a BCE-WorldCom/MCI deal
less likely, industry watchers said.
ÿIn fact, one unconfirmed rumor had WorldCom/MCI turning down BCE's
request for stronger links.
ÿOther telecommunications experts said the talks may be less substantial
than the stock market expected.
ÿ"I don't think this suggests there is going to be a share exchange,"
said Douglas Cunningham of Network Research Inc.
ÿ"It's probably more about software uniformity and traffic exchange."
ÿ |
