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To: ANANT who wrote (2668)	6/19/1998 12:02:00 AM
From: Kramer	Read Replies (1) \| Respond to of 11568

June 19, 1998 WSJ Cable & Wireless Drops MCI Suit, Giving WorldCom Deal a Boost By JARED SANDBERG Staff Reporter of THE WALL STREET JOURNAL NEW YORK -- Cable & Wireless PLC dropped its lawsuit against MCI Communications Corp., clearing an obstacle in WorldCom Inc.'s drive to win regulatory approval of its $37 billion takeover of MCI. The C&W suit could have delayed completion of the merger. The British company had claimed in federal court in Washington that MCI was about to renege on its agreement to sell some of its Internet assets to C&W for $625 million and instead shop the entire MCI business to other carriers. Earlier this week, C&W's chairman, Richard Brown, spoke to MCI's chairman, Bert C. Roberts Jr., and resolved to drop the suit in light of productive discussions between the companies. C&W's complaint was one more impediment in what has become a difficult merger to complete. European antitrust regulators have taken a hard line on the WorldCom-MCI deal, fearful that the combined companies would lord over too much of the Internet. When it became clear that European Union regulators didn't believe MCI was shedding enough of its Internet business in the C&W deal, MCI decided to put the entire business up for sale. That decision could clear the way for European approval on July 15, a formal deadline for the regulators to pass judgment on the merger. Expected Recommendation Friday, EU advisers are expected to recommend that national antitrust chiefs approve the merger with several conditions, including that MCI agree to sell its entire Internet business and find a buyer by next month. A spokesman for MCI, however, was quick to dismiss any notion that the company has reached an accord with regulators. "We don't have an agreement at this time and we continue to have productive discussions," the spokesman said. Privately, executives familiar with the discussions said there was no certain indication from regulators, despite widespread belief that the new terms of MCI's divestiture could clear any hurdles. "Regulators never tell you, 'That looks good,' " said one executive familiar with the talks. "They tell you, 'We don't have any additional questions at this time.' " It remains unclear what company would buy MCI's Internet assets. The short list includes Williams Cos., IXC Communications Inc., and British Telecommunications PLC, as well as C&W. Other companies that have expressed interest include Qwest Communications International Inc., PSINet Inc. and WinStar Communications Inc. Corporate Customers MCI is ready to put on the block 3,000 corporate customers of the Washington company's high-speed Internet service, as well as more than 200,000 consumer users, people familiar the plan said. The merger partners are also ready to make various assurances that WorldCom wouldn't try to lure any of MCI's current customers back into the combined company, one person said. As new concessions have been made, EU regulators solicited comments from MCI and WorldCom's competitors as to whether such moves would constitute full divestiture of MCI's assets. If the two companies get the nod from European authorities, that would leave the U.S. Department of Justice as the merger's last hurdle.