FCC approves MCI WorldCom purchase of SkyTel

No. 2 long-distance carrier to gain paging network, 1.6 million customers

August 27, 1999|By BLOOMBERG NEWS

WASHINGTON -- MCI WorldCom Inc., the No. 2 U.S. long-distance telephone company, won federal approval yesterday for its $1.75 billion purchase of SkyTel Communications Inc., the second-largest paging company.

The Federal Communications Commission ruled that the transaction would benefit the public.

Shareholders of Jackson, Miss.-based SkyTel will vote on the acquisition Sept. 29. The transaction is expected to be completed Oct. 1.

MCI WorldCom, based in Clinton, Miss., will gain 1.6 million customers and a paging network to offer e-mail and other data services.

Chief Executive Officer Bernard Ebbers, who built MCI WorldCom with 60 acquisitions in this decade, is expected to make more wireless purchases, because he does not own a wireless phone network, analysts have said.

Shares of MCI WorldCom fell $3.0625 to $78.3125, and SkyTel's dropped 43.75 cents to $20.

MCI WorldCom will exchange a quarter-share of its stock for each SkyTel share if the average trading price for MCI WorldCom is greater than $80 during the 20 trading days ending three trading days prior to the completion of the transaction.

If MCI WorldCom's average trading price is between $72 and $80 per share, the exchange ratio will be increased to a number of MCI WorldCom shares equal to $20 divided by the average price.

If the average trading price for MCI WorldCom common shares is less than $72 per share, the exchange ratio will be fixed at 0.2778 share of MCI WorldCom stock for each share of SkyTel common stock.

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