WorldCom's $37bn MCI Takeover Bid Faced with New Hurdles

The US long-distance phone giant MCI is at the center of a complex and contentious takeover bid, with WorldCom's offer now facing new obstacles. GTE, the phones group that lost out in a three-way offer battle, has lodged a complaint with regulators, raising concerns about the potential impact on the industry. GTE's move comes as the company reveals plans to expand its operations in Europe and explores a possible alliance with British Telecom.

Key Takeaways:

• GTE has lodged a complaint with the Federal Communications Commission (FCC) regarding WorldCom's $37bn takeover bid for MCI, citing concerns about the potential impact on the industry, including the possibility of increased wholesale line charges to other operators.
• GTE's vice chairman, Mike Masin, expressed reservations about the deal, including the risk of WorldCom using its dominance to raise prices.
• GTE had previously entered the bidding frenzy for MCI with a $28bn all-cash offer, but the company's plans were ultimately overtaken by WorldCom's revised offer.
• The MCI board had recommended WorldCom's offer to shareholders in November, but Masin noted that there was still a risk that the deal could fall foul of US regulators or that WorldCom's share price could drop, reducing the price paid to MCI's investors.
• GTE plans to expand its operations in Europe and has signaled a desire to build on its relationship with British Telecom, which had previously considered merging with MCI.

Statistics:

• $37bn: The value of WorldCom's revised offer for MCI.
• $30bn: The value of WorldCom's initial offer for MCI.
• $28bn: The value of GTE's all-cash offer for MCI.
• 3: The number of parties involved in the bidding War for MCI, including WorldCom, GTE, and British Telecom.

Sources:

• "WorldCom's MCI Bid Faces Obstacles" by Bloomberg News
• "GTE Objects to WorldCom's MCI Bid" by Reuters