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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (2488)	5/26/1998 4:12:00 PM
From: SteveG	Read Replies (2) \| Respond to of 11568

<A> WorldCom, MCI Hit 52-Week Highs; Regulatory Progress Seen By Shawn Young NEW YORK (Dow Jones)--Shares of both WorldCom Inc. (WCOM) and MCI Communications Corp. (MCIC) hit 52-week highs Tuesday after European regulators said they are coordinating with U.S. regulators on their investigation into the companies' proposed merger. "We are trying to obtain the same concessions as the Justice Department," said European Union Competition Commissioner Karel Van Miert Tuesday. A spokesman for Van Miert later said the European Union and U.S. authorities hope to announce their decisions about the merger at the same time. European regulators face a July 15 deadline. U.S. antitrust authorities do not have a deadline for approving the $37 billion deal. Opponents of the merger fear the combined company would have a stranglehold on the Internet pipeline, a concern the companies say is unfounded. Investors viewed Van Miert's statement as a reassurance that the deal will be approved and an indication that approval could come swiftly on both sides of the Atlantic, said PaineWebber Inc. analyst Eric Strumingher. Van Miert's statement also relieves worry that the Justice Department and the European Union could come out with different sets of conditions for approving the merger, said UBS Securities Inc. analyst Linda Meltzer. She said the companies' shares also benefitted from a major contract with GE Information Services, a unit of General Electric Co. (GE). Meltzer said the contract could be worth $500 million over five years. Shares of WorldCom reached an intraday high of 46 3/8, passing the previous mark of 45 1/2 reached Friday. More recently shares were up 1 1/8, or 2.5%, to 46 3/8 on Nasdaq volume of 7.4 million. Average daily volume is 9.6 million. MCI shares went as high as 54 3/16 earlier, surpassing the 52-week high of 53 reached April 16. Recently shares were up 1 7/32, or 2.2%, to 54 1/16 on Nasdaq volume of 2.1 million shares. The daily average is 4 million. Cooperation between European and U.S. regulators does not mean a free ride is in store for the companies, which say they expect to close the deal by mid-summer. Last week E.U. competition chief Van Miert said a hearing the European Commission held on the merger earlier this month "confirmed the Commission's concerns." Van Miert said the commission is waiting for remedies from MCI and WorldCom, but he didn't elaborate on what those remedies are. They may center on some of MCI's domestic wholesale Internet assets, which people close to the matter say the company has put up for sale to appease regulators. Analysts said such a divestiture would have virtually no impact on the combined company since the business generates about $200 million in annual revenue, compared to $1.8 billion in Internet revenue for WorldCom. Both companies declined to comment on Van Miert's remarks, and an MCI spokesman declined to comment on the possible sale of MCI assets. Opponents of the merger and some industry experts say regulatory concerns about the WorldCom-MCI merger are more serious than the companies are letting on. Despite this concern, analysts said investors are generally taking Van Miert's statements as an indication that a fairly prompt and painless approval is likely. Meanwhile, the pending merger seems to have attracted new business to WorldCom, said Meltzer of UBS. WorldCom's contract with GE is its first major outsourcing contract, and the deal represents a new source of revenue for WorldCom, Meltzer said. The deal clearly anticipates the combined outsourcing abilities of WorldCom and MCI, she added.