14:26 Dow Jones story on WCOM/NXTL rumor:
NEW YORK (Dow Jones)--Nextel Communications Inc. (NXTL) surged Thursday on a fresh round of rumors that the wireless phone company, which serves businesses, would be bought by MCI WorldCom Inc. (WCOM), traders said.
But Nextel spokesman Ben Banta said the rumor is unfounded. Nextel, based in McLean, Va., is not in talks with MCI WorldCom, of Jackson, Miss, he said. An MCI WorldCom spokesman declined to comment, citing company policy against commenting on rumors.
Nextel shares have been gaining steadily in recent days, and Banta said the increase probably reflects a recovery from a sell-off that followed third-quarter earnings.
Some options traders who specialize in takeovers said they have heard rumors about Nextel and MCI WorldCom, but are cautious. The market's recent rebound has revived many a flimsy takeover rumor, they said.
Nextel's call options were active, but a trader at the Chicago Board Options Exchange said most people were taking profits out of existing positions.
Since the acquisitive MCI WorldCom serves business and lacks a wireless division, speculation that such an acquisition could be in the offing has been around for some time. Phone companies are increasingly eager to offer customers a full range of communications services, and Nextel's extensive network and popularity among business customers would be an attractive asset for MCI WorldCom.
However, MCI WorldCom is currently busy digesting a spate of acquisitions, including WorldCom's megamerger with the former MCI Communications Corp., which closed late in the third quarter.
Shares of Nextel recently were up 1 5/8, or 7.7%, to 22 5/8 on Nasdaq volume of 5.5 million shares, compared with a daily average of 3.1 million. MCI WorldCom shares were down 1 1/8, or 2%, to 56 5/16 in moderate Nasdaq trading.
It is possible, market sources said, that MCI WorldCom could take a stake in one of Nextel's major investors.
- Shawn Young, 201-938-5248;
and Steven M. Sears, 201-938-5355
(END) DOW JONES NEWS 11-05-98
02:26 PM |
