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

To: shoe who wrote (2553)	6/8/1998 10:10:00 PM
From: Robert Holmes	Read Replies (1) \| Respond to of 11568

The European regulators are working closely with the U.S. DoJ on this merger oversight and just because they have been more vocal does not mean both sides are not in agreement on what should be done. I'm long WCOM and would like to the merger approved, but let's not act as if it's the big bad socialist Europeans that are solely in the way. GTE and its council (former AG William Barr) are having significant input into this discussion, as well as Sprint et al. This is new ground for everyone and regulators want to do things right early for a change before they create a situation that cannot be reversed later. My guess is that regulators will have a difficult time negating the merger with the Cable and Wireless sale, although they would like to see more. They may be stalling with the hopes of getting one more concession. I guess we'll have to stay tuned.

To: shoe who wrote (2553)	6/10/1998 11:29:00 AM
From: Anthony Wong	Respond to of 11568

WorldCom, MCI Say EU Demands Won't Derail Merger (Update1) Bloomberg News June 10, 1998, 8:05 a.m. PT WorldCom, MCI Say EU Demands Won't Derail Merger (Update1) (Adds comments from MCI. Updates with stock activity in 2nd to last paragraph.) Brussels, June 10 (Bloomberg) -- WorldCom Inc. and MCI Communications Corp. said they're confident they won't have to sell WorldCom's UUNet Technologies Internet unit to get regulatory approval for their $41.8 merger, which European Union regulators have said could dominate global Internet traffic. The European Union isn't demanding that the companies sell UUNet to get approval, said Stefan Rating, spokesman for EU Competition Commissioner Karel Van Miert. Instead, both sides are looking at other potential solutions such as selling other MCI- WorldCom Internet assets, analysts said. MCI, the No. 2 U.S. long-distance phone company, already agreed to sell its wholesale Internet business, which carries other companies' Internet traffic, to Cable & Wireless Plc. Last week, though, Van Miert said that wasn't enough to guarantee the combined company won't dominate the Internet backbone, the central electronic network used to carry Internet traffic. ''We look forward to a resolution that doesn't have to involve the disposal of UUNet,'' said Mark Weeks, a spokesman for WorldCom in London. ''What's crucial here is to get the deal done.'' Weeks' comments followed a Wall Street Journal Interactive Edition report that WorldCom would call off the acquisition if EU antitrust regulators demanded the sale of WorldCom's UUNet, the leading Internet service company. Daily Talks WorldCom, the No. 4 U.S. long-distance company, and MCI are in daily talks with EU antitrust officials and are trying to convince them the proposed MCI sale eliminates all overlap between the two companies' Internet backbone businesses. He didn't rule out the possibility of MCI making a further offer, though. ''Once we understand what it is they want, we'll try and work toward an accommodation to enable the merger to go through,'' Weeks said, adding that a sale of UUNet is out of the question. On whether the EU demands could be stringent enough to derail the acquisition, Weeks said, ''There's always that outside chance, but we aren't even considering it.'' MCI spokesman Frank Walter said the company is ''optimistic'' that the companies can work out a ''solution that is agreeable to all parties.'' Van Miert has said a sale of UUNet would be the best way to satisfy EU concerns. Failing that, sale of MCI Internet assets would also be acceptable if regulators were convinced that no overlap will remain between the two companies' Internet-backbone business, he said. Van Miert last week wouldn't specify exactly what the companies need to do to win EU approval, though he said any sale of MCI's Internet activities would have to ensure that WorldCom couldn't later reabsorb them. Internet Traffic Concern European and U.S. antitrust officials raised concerns that a combined WorldCom-MCI would control too much of the world's Internet traffic -- more than 50 percent, according to the Gartner Group, a consultancy that tracks the Internet market. The acquisition is also being reviewed by the U.S. Justice Department and Federal Communications Commission. Rating, Van Miert's spokesman, said yesterday that Van Miert is likely to recommend a decision on the merger to the 20-member European Commission, the EU's executive agency, next Wednesday. The companies face a July 15 deadline for a final EU ruling. An advisory committee of competition officials from the 15 EU countries will meet on June 19 to review the commission's decision. The commission should establish its position before then under EU competition rules, though in past cases -- such as last year's Boeing Co.-McDonnell Douglas Corp. merger -- negotiations have continued until just before the final deadline. MCI's shares fell 25/32 to 51 1/8 and WorldCom's fell 9/16 to 44 11/16. WorldCom would face stiff penalties if it doesn't win regulatory approval for the MCI purchase, analysts said. It'll have to pay $1.6 billion to MCI and an additional $250 million to British Telecommunications Plc, which owns 20 percent of MCI. --Alison Jahncke in the Brussels bureau (32 2) 285 4300 with