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To: Doughboy who wrote (4545)	5/28/1999 6:18:00 PM
From: Anthony Wong	Respond to of 11568

17:51 MCI WorldCom to buy SkyTel for $1.3 billion (combines takes, adds details throughout, adds byline) By Jessica Hall NEW YORK, May 28 (Reuters) - MCI WorldCom Inc. <WCOM.O>, the No. 2 U.S. long distance telephone company, agreed on Friday to buy paging company SkyTel Communications Inc. <SKYT.O> for $1.3 billion in stock in a move that will allow it to expand into wireless messaging and data services. Based on MCI WorldCom's closing stock price on Friday, the long-rumored agreement values SkyTel common stock at $21.59, a 6 percent premium over SkyTel's closing stock price. Shares of SkyTel have risen sharply in recent weeks on expectations it may be acquired by MCI WorldCom. SkyTel, which has 1.6 million paging customers, recently hired Warburg Dillon Read to help it explore its strategic options. Rumors of a possible MCI WorldCom deal were further stoked on Tuesday on news that an MCI WorldCom employee reserved a World Wide Web address that included both companies' names. MCI WorldCom said that the employee had acted on his own initiative and that the Web address request was not "an indication of any official company intention." MCI WorldCom on Friday said the requested Web address and the acquisition agreement were a "coincidence." Shares of MCI WorldCom fell $1.125 to $85.25 in after hours trading on Friday following the announcement. Shares of SkyTel were halted. The deal follows MCI WorldCom's agreement last month to purchase wireless cable television company CAI Wireless Corp. <CWSS.OB>. The company plans to use CAI Wireless' technology to provide voice and data services directly to consumers without using the Baby Bell's local phone networks. MCI WorldCom this year has walked away from opportunities to buy wireless phone companies Nextel Communications Inc. <NXTL.O> and AirTouch Communications Inc. <ATI.N>. MCI WorldCom, however, has said it expects to move into the wireless telephone business in the future. Under the agreement, each SkyTel share will be exchanged for 0.25 of a share of MCI WorldCom, as long as MCI WorldCom's stock trades above $80 a share in the days before the deal closes. Holders of SkyTel's preferred stock will receive one share of MCI WorldCom preferred stock for each share of SkyTel preferred stock that they own. The MCI WorldCom preferred stock will be convertible into common stock. Including debt, the total value of the deal is about $2.06 billion, an MCI WorldCom spokesman said. "SkyTel is the industry leader in wireless messaging, and is ahead of the curve in developing and implementing wireless data applications... SkyTel also brings a talented management team with a wealth of experience in wireless communications," MCI WorldCom Chief Executive Bernie Ebbers said in a prepared statement. MCI WorldCom said the deal will give a slight boost to its profits but will not significantly affect its results. SkyTel had 1998 revenues of $518 million, while MCI WorldCom had more than $30 billion in revenues last year. MCI WorldCom and SkyTel are both headquartered near Jackson, Miss. and MCI WorldCom is currently the largest reseller of SkyTel services. SkyTel has about 2,000 employees, including about 800 in Jackson, Miss. MCI WorldCom, which has about 74,000 employees, declined to comment on any possible job cuts. The deal is expected to be completed in six to nine months, pending shareholder and regulatory approval.

To: Doughboy who wrote (4545)	5/28/1999 6:57:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

Bradford's Bacurin on MCI WorldCom Purchase of SkyTel: Comment Bloomberg News May 28, 1999, 6:23 p.m. ET Nashville, Tennessee, May 28 (Bloomberg) -- Mark Bacurin, telecommunications analyst at J.C. Bradford & Co., comments on No. 2 U.S. long-distance phone company MCI WorldCom Inc.'s agreement to buy No. 2 U.S. paging company SkyTel Communications Inc. for $1.8 billion in stock and debt. Bacurin rates MCI WorldCom ''strong buy.'' MCI WorldCom owns ''UUNet, which is the largest Internet service provider in the world. What SkyTel can really give them is a wireless extension of some of their Internet capabilities. ''A big cost to SkyTel is the cost of buying communications network capacity from companies such as (MCI) WorldCom.'' Now SkyTel won't have to do that, he said. In addition, because both companies are based in Jackson, Mississippi, there probably will be some headquarters consolidation, cutting costs, he said. On whether MCI will make more wireless acquisitions: ''I think it's inevitable that they will. You're increasingly seeing more and more long-distance minutes traveling on wireless networks. ''SkyTel definitely doesn't solve their wireless voice communications needs. It's a narrowband network and you really need broadband to do voice'' and emerging Internet applications. ''It'll be a nice extension of their communications capabilities. MCI WorldCom is building itself to be one of the dominant communications companies in the world. It is going to be one of several players that can offer the full suite of communications products.'' On the price and terms of the purchase: ''If you can do it additive (to earnings) and acquire a company in your backyard, all the better.'' quote.bloomberg.com