MCI Communications Corp has reached an agreement with British Telecommunications Plc that will allow the US long-distance carrier to open full discussions with both WorldCom Inc and GTE Corp over the two company’s separate proposals to acquire MCI. BT’s move to acquire MCI began just under a year ago and as part of their strategic merger agreement MCI was restricted in the discussions it could hold with potential rival bidders. MCI showed little desire to talk with WorldCom regarding its unsolicited bid for the company made earlier this month. In the two weeks preceding the WorldCom bid MCI would only say it would discuss the issue at its next board meeting and that it would be seeking further advice. However, GTE cash offer for MCI made late on Wednesday, significantly widened the scope of the board’s options and obligations. Both the WorldCom and GTE bids weigh in significantly higher than BT’s renegotiated cash and share offer. WorldCom Inc has made a $41.50-per-share unsolicited stock offer for MCI and the all cash bid from GTE for $40 per share. BT’s offer of $36.50 per share for the 80% of MCI that it does not already own was reduced from a $43.50 per share figure agreed last year following MCI’s a disclosed wider-than-expected losses in its local phone business and slower growth in long distance business. BT is increasingly looking less likely to win over MCI shareholders to its offer but, with its 20% holding in MCI it may have a key role in deciding which of the two rival bids for MCI is successful. Meanwhile, WorldCom Inc has responded to GTE Corp’s surprise $28bn cash bid for MCI Communications Corp saying that its believes its share offer provides superior near-term and long- term value for MCI shareholders. WorldCom maintains that it offers a more compatible culture than GTE and MCI.
