MCI Communications Corp said at the turn of the year that it would like to buy back the 47m of its shares -some 16% of the total – held by IBM if the latter was agreeable, and IBM has now acceded to the request. The Washington phone company will pay $677m for the shares, and IBM has kindly agreed to an offset arrangement whereby IBM will buy $400m of non-voting MCI preference shares paying 7.35% in an agreement that supersedes the one where MCI had the right to demand that IBM buy $400m of convertible – and therefore effectively voting – debentures, with the option to redeem all or part of the issue at any time. IBM acquired the shares in March 1986 as part of its sale of Satellite Business Systems to MCI, and at one time was expected eventually to buy up the phone company outright.
