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To: Eric L who wrote (5115)	10/2/1999 10:40:00 AM
From: Anthony Wong	Respond to of 11568

Kagan on Possible BellSouth Bid for Sprint: Analyst Comment 10/1/99 5:48:00 PM Source: Bloomberg News Atlanta, Oct. 1 (Bloomberg) -- Jeffrey Kagan, an independent telecommunications analyst based in Atlanta, comments on a possible BellSouth Corp. bid for No. 3 U.S. long-distance carrier Sprint Corp. Business Week Online reported that BellSouth, which sells local phone service in nine southeastern states, is considering a bid for all or part of Sprint. MCI WorldCom Inc., the No. 2 U.S. long-distance carrier, is discussing a merger with Sprint that would give MCI WorldCom the national wireless network operated by Sprint PCS, a person familiar with the negotiations said last Friday. MCI WorldCom needs wireless to offer customers a full bundle of telecommunications services. ''After the dust settles of a merger with either company, (Sprint Chairman and Chief Executive William) Esrey is not going to share the captain's chair with anybody, and he's not going to take the No. 2 spot.'' ''A BellSouth-Sprint combination would be enormously helpful for BellSouth's future. A, It increases their girth; B, It gives them a national wireless network; C, It gives them a national data network;, D, It gives them loads of long-distance customers right out of the gate, and they can be in the long-distance business outside of their region right now. It would be exactly what the doctor ordered for BellSouth.'' ''For MCI (WorldCom), it could fill in a couple holes. For BellSouth, it would transform the whole company overnight.'' ''For the same reason it makes perfect sense for BellSouth to invest in Qwest (Communications International Inc., the No. 4 U.S. long-distance carrier), to have access to the nationwide network that they're building, Sprint would give (BellSouth) customers and revenue and history. Sprint is a lot like BellSouth -- very conservative. Sprint employees would really feel more at home, I think, in a BellSouth atmosphere than in the really rough- and-tumble, cut-to-the-bone MCI WorldCom culture.'' ''BellSouth is just an investor in Qwest, so I don't think anything has to happen (with BellSouth's 10 percent stake). . . The question is, would they need a Qwest if they've got a Sprint?'' ''Clearly, we've been waiting for Sprint to go up on the block for years -- not a question of if, just a question of when. Esrey's done a great job of making the company very attractive. Sprint would be a crown jewel in anybody's cap. MCI WorldCom needs the wireless component, BellSouth needs the nationwide data component.'' ''If BellSouth can scoop up all of Sprint, that would be the best move for them, because Sprint is a well-rounded company, has all of the pieces. . . if they were just have to pick up the table scraps after MCI WorldCom had to divest (some pieces), I don't know if it would be as valuable.'' ''I don't think Esrey would've been happy just getting one offer. He wants to play them off against each other and squeeze as much value out of the deals for the shareholders as he can, and you can only do that by having a bidding war.'' ''I don't think Esrey is so worried about the culture as maximizing value of the shares.'' Related News Sprint's Esrey Addresses MCI WorldCom Merger Talk, - Bloomberg Kagan on Possible BellSouth Bid for Sprint: Analyst C - Bloomberg BellSouth May Bid for Sprint, Business Week Reports (Up - Bloomberg BellSouth May Bid for Sprint, Business Week Online Repo - Bloomberg MCI WorldCom Completes $1.61 Bln Purchase of SkyTel (U - Bloomberg MCI WorldCom Completes $1.63 Bln Purchase of SkyTel (C - Bloomberg MCI WorldCom/SkyTel Merger Completed - PR Newswire Sprint Options Active on Prospects of Purchase by - Bloomberg FCC Won't Let Mergers Hurt Competition, Kennard - Bloomberg

To: Eric L who wrote (5115)	10/4/1999 1:56:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 11568

Sprint Asks BellSouth for Sweetened Bid But Leans Towards WorldCom Oct 04, 1999 1:40 PM NEW YORK -(Dow Jones)- In a surprising development, Sprint Corp.'s board of directors Monday offered BellSouth Corp. a chance to increase its offer before Sprint accepts a takeover offer made by MCI WorldCom Inc. Sprint's board was expected to accept a $65 billion takeover offer made by MCI WorldCom Inc. despite a last-minute $72 billion bid over the weekend from BellSouth Corp. But Monday morning, Sprint decided to give BellSouth a last shot at staying in the race by asking for a better offer. "It basically tells you they're opening the door for BellSouth," said one market source. "It's very fluid, I don't think it's over yet." The Wall Street Jornal reported Sprint's (FON) board met Sunday in New York to weigh the two offers and adjourned without a decision. Barring a knockout offer from BellSouth, Sprint's board it is expected to formally vote for the MCI WorldCom proposal Monday evening. MCI WorldCom's (WCOM) board is also expected to vote on the proposed deal Monday evening. Sprint was expected to proceed with a WorldCom bid even though the BellSouth offer, which offers stock and cash, is richer than the WorldCom offer, which is an all-stock offer that fluctuates in value along with WorldCom's stock price. Both bidders are vying for a company with more than $17 billion in annual revenue with a strong national long-distance and wireless business. Each bidder would have regulatory problems to overcome. WorldCom would probably have to divest itself of Sprint's Internet business and a BellSouth-Sprint pact could result in significant wireless divestitures. William Esrey, Sprint's chairman and chief executive officer, favors the WorldCom proposal because of the strategic fit. But Esrey may have problems with his partners France Telecom SA and Deutsche Telekom AG, which could complicate a transaction. The chief executives of the two companies sit on the board of Sprint and both foreign carriers own 10% stakes in Sprint. The two are opposed to the WorldCom proposal because of antitrust concerns in Europe. Esrey is believed to have rebuffed an attempt by the two carriers to release them from a standstill agreement that precludes the two companies from increasing their stake in Sprint or talking to other bidders. Ron Sommer, Deutsche Telekom's CEO, and Michel Bon, France Telecom's CEO, objected to any move to try to vote without asking for a "best and final" offer from both WorldCom and BellSouth. A special committee of Sprint's board, believed to consist of all the directors except for Sommer and Bon, earlier approved the WorldCom offer. Depending on how the deal is valued, either of the offers could be worth more than the largest planned takeover to date, last year's $82.5 billion agreement between Exxon Corp. and Mobil Corp. For BellSouth, the Baby Bell still lacks permission to offer long-distance services in any of its nine states; a deal would mean it would have to shed Sprint's long-distance customers in the South or wait until local companies can offer long-distance services. Although the conservative Bell has eschewed big mergers during the consolidation of the telecom industry, it was persuaded to move by the argument that Sprint is the last independent long-distance phone company with a premier wireless business. Since the 1996 telecom-deregulation law, the seven original Baby Bells have become four. Bell Atlantic Corp. acquired Nynex Corp. and SBC Communications Inc. acquired Pacific Telesis Group. SBC has also agreed to acquire Ameritech Corp., a deal that could win approval from the FCC as soon as this week. And Bell Atlantic has agreed to merge with the biggest non-Bell local phone company, GTE Corp. U S West Inc. has agreed to be acquired by Qwest Communications International Inc., the upstart long-distance carrier. The big long-distance carriers have gone on an acquisition tear as well. MCI Worldcom was formed last year by the merger of MCI Communications Corp. and Worldcom Inc. AT&T Corp. has agreed to acquire two of the biggest cable television companies, Tele-Communications Inc. and Mediaone Group Inc. In the rivalry for Sprint, "a bidding war is entirely possible, but Sprint has a clear preference for MCI WorldCom," said Sanford C. Bernstein analyst Tod Jacobs. That preference would probably hold even if a third bidder, most likely Deutsche Telekom, were to emerge, Jacobs said. Sprint's shares hit a 52-week high early Monday of $61, passing the previous high of $57.47 reached June 4. Near midday, the stock was up $2.125, or 3.7%, at $59.125. MCI WorldCom's shares were up 50 cents at $71, suggesting investor confidence in both the deal and MCI WorldCom's ability to prevail. Shares of BellSouth were off $2.50, or 5.5%, at $42.875. Copyright (c) 1999 Dow Jones & Company, Inc. smartmoney.com All Rights Reserved.