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To: MGV who wrote (2861)	7/14/1998 1:14:00 AM
From: Anthony Wong	Read Replies (2) \| Respond to of 11568

Cable & Wireless to Acquire MCI Internet Assets for About US$2 Billion Bloomberg News July 13, 1998, 6:20 ET C&W to Buy MCI Internet Assets for About $2 Billion (Update1) (Adds background on Cable & Wireless's U.S. strategy in last two paragraphs.) Washington, July 13 (Bloomberg) -- MCI Communications Corp. is expected to announce as soon as tomorrow that Cable & Wireless Plc, the No. 2 U.K. phone company, agreed to buy all of its Internet operations for $1.5 billion to $2 billion in cash, according to people familiar with the companies' plans. Simultaneously, the U.S. Justice Department is expected to approve MCI's $46.5 billion sale to WorldCom Inc., the people said. The sale of MCI's Internet business was a condition for meeting regulators' demands. The sale and U.S. antitrust approval bring MCI and WorldCom one step closer to completing their combination this summer, creating a stronger rival to No. 1 U.S. phone company AT&T Corp. The agreement also bolsters Cable & Wireless's U.S. business. ''Now they can get on with the merger,'' said Jeffrey Kagan, president of market researcher Kagan Telecom Associates in Atlanta. Cable & Wireless closed unchanged at 788 pence. Jackson Mississippi-based WorldCom rose 11/16 to 51, while Washington- based MCI rose 1 1/8 to 62, both records. Since WorldCom's purchase of MCI was unveiled in November, MCI shares have climbed 68 percent, while WorldCom's shot up 54 percent. The Standard & Poor's 500 Index gained 26 percent during the same time. MCI declined to comment. Peter Eustace, a spokesman at Cable & Wireless in London, said the company is continuing to negotiate with MCI. He declined to say what the companies are talking about or what Cable & Wireless may be interested in buying from MCI. European regulators earlier said that a plan to sell just MCI's wholesale unit to Cable & Wireless didn't ease concern that MCI and WorldCom would dominate the global network. Cable & Wireless Three weeks ago, Cable & Wireless Chief Executive Richard Brown said the company is in talks to buy the Internet assets that MCI must shed to get regulatory approval for its sale to WorldCom, the No. 4 U.S. long-distance company. ''The future of communications is the Internet,'' Brown said in an interview in New York. ''It's an extremely efficient way to transmit data.'' Cable & Wireless transmits a third of the world's Internet traffic outside the U.S., he said. ''This allows Cable & Wireless to get into the Internet big time,'' analyst Kagan said. Cable & Wireless would get MCI's 1,300 wholesale customers that resell Internet services in 76 countries as well as MCI's retail consumer and business Internet customers. In 1997, MCI's Internet business had sales of $230 million. In the first quarter, sales were $83 million. Cable & Wireless, which provides phone services in more than 70 countries, has been looking to grab a larger share of the lucrative U.S. market. The purchase would make it the fifth- largest carrier of Internet traffic in the U.S., Brown said last month. Beefing up the fast-growing Internet business could also make Cable & Wireless a more attractive acquisition target to companies like AT&T Corp. and GTE Corp. that are looking to build bigger data businesses and expand overseas, analysts said in May, after Cable & Wireless agreed to buy MCI's wholesale business. --Andrew Brooks and Colleen McElroy in the Princeton newsroom