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To: ANANT who wrote (2869)	7/14/1998 12:54:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

ANANT, Garry and all, Bloomberg news which mentioned US Justice: Cable & Wireless to Buy MCI Internet Line for $2 Bln (Update2) Bloomberg News July 14, 1998, 10:44 a.m. ET Cable & Wireless to Buy MCI Internet Line for $2 Bln (Update2) (Adds details on Uunet, updates stock activity.) Washington, July 14 (Bloomberg) - MCI Communications Corp. will announce in the next few days that Cable & Wireless Plc, the No. 2 U.K. phone company, will buy 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 the $46.5 billion sale of MCI, the No. 2 U.S. long- distance company, to No. 4 WorldCom Inc., the people said. Regulators were concerned that WorldCom and MCI together would dominate the Internet business. The sale and U.S. antitrust approval bring MCI and WorldCom a 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' U.S. business by giving it assets and customers in the fast-growing Internet market. ''Now they can get on with the merger,'' said Jeffrey Kagan, president of market researcher Kagan Telecom Associates. MCI rose 1 1/16 to 63 1/16 in midmorning trading and WorldCom gained 7/8 to 51 7/8. Both touched records earlier. Cable & Wireless climbed 21 pence to 809. Since WorldCom's purchase of MCI was unveiled in November, MCI shares have climbed 71 percent, while WorldCom's shot up 56 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 Cable & Wireless wants to expand into the U.S., the home of 40 percent of the world's multinational companies, where its Cable & Wireless Inc. unit is rapidly being dwarfed by the combination of larger phone rivals. ''The future of communications is the Internet,'' said Richard Brown, chief executive of Cable & Wireless, in an interview last month in New York. ''It's an extremely efficient way to transmit data.'' At the time, Brown said the company was in talks to buy the Internet assets that MCI must shed to get regulatory approval for its sale to WorldCom. 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' purchase fits its new strategy of focusing on ventures it controls and selling stakes in other businesses. The company, which operates in 72 countries, has been criticized by analysts for spreading its resources too thinly under the management of former Chairman Lord Young and former Chief Executive James Ross. They left the company in 1996. Acquisition Target Under the sale, 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. Beefing up the fast-growing Internet business also could make Cable & Wireless a more attractive acquisition target to companies like AT&T and GTE Corp. that are looking to build bigger data businesses and expand overseas, analysts said. After the sale, WorldCom and MCI will still be one of the largest providers of Internet services, thanks to WorldCom's Uunet unit. -- Andrew Brooks and Colleen McElroy in the Princeton newsroom