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To: mmeggs who wrote (3222)	8/12/1998 5:21:00 PM
From: Anthony Wong	Respond to of 11568

British Telecom to Pay $1 Bln for MCI's Concert Stake (Update1) Bloomberg News August 12, 1998, 4:42 p.m. ET British Telecom to Pay $1 Bln for MCI's Concert Stake (Update1) (Adds analysts' comments in 4th, 10th paragraphs. Updates share activity.) London, Aug. 12 (Bloomberg) -- British Telecommunications Plc said it will pay $1 billion for MCI Communications Corp.'s 24.9 percent stake in their Concert Communications Services joint venture, severing its ties with the company it once hoped to buy. Europe's third-biggest phone company said the payment will be made immediately after WorldCom Inc. completes its $49 billion purchase of MCI, expected in about a month. WorldCom outbid BT last November for MCI. Now British Telecom wants to team up with MCI's rival AT&T Corp., the largest U.S. phone company, to offer voice, data and video services to multinational corporations, and the purchase moves it one step closer to that goal. British Telecom, the biggest U.K. phone company, wants to move quickly to establish a foothold in the U.S., home to about 40 percent of the world's largest companies. ''It enables them to move ahead to prepare for the AT&T joint venture,'' said Robert Wilkes, an analyst at Brown Brothers Harriman. BT said the $1 billion payment will have a ''negligible effect'' on earnings. BT will get $7 billion from WorldCom for its 20 percent stake in MCI. BT American depositary receipts rose 2 to 133 3/8 in late trading. MCI shares rose 1 5/8 to 61 3/4. MCI will continue to hold the rights to distribute Concert services in the U.S., along with AT&T, for two years, BT said, and existing contracts will be served by Concert and MCI for another three years after that. ''This is the final piece in the puzzle,'' said Nancy B. Gofus, senior vice president at Concert. ''Any last uncertainty around Concert is gone.'' Concert now serves more than 3,800 customers in 50 countries. MCI originally invested about $250 million when Concert was formed five years ago. ''It's a nice return on their investment,'' said Daniel Zito, an analyst at Legg Mason Wood Walker Inc., who has a ''buy'' rating on MCI. The AT&T-BT venture, which will have about $3 billion in assets and $10 billion in annual sales, will be equally owned by both companies and is expected to be completed within a year. --Christine Harper in the London newsroom on (44 171) 330-7982 news.com