Chief confirms MCI hired advisers amid rumors of possible sale plans
MCI Inc. chief executive Michael Capellas said yesterday that the telephone provider has retained advisers, responding to a question during an investors' conference on a possible sale of the company.
"We have a set of advisers and if that is a surprise to anybody in this room, and they don't know who these folks are, I would be shocked," Capellas said at a conference in San Francisco sponsored by Banc of America Securities.
MCI, the number two US long-distance phone company, has become a more affordable target after its shares dropped 26 percent this year amid a price war with competitors including AT&T Corp. Verizon Communications Inc. and other US local phone firms, known as Baby Bells, could use an MCI purchase to bolster their businesses that cater to large corporate clients.
"The endgame is to end up part of a larger Bell carrier," said John Hodulik, a New York analyst at UBS AG, referring to Verizon, SBC Communications Inc. and BellSouth Corp. Still, "I don't expect a deal for the next twelve months," said Hodulik, who rates MCI shares "reduce" and doesn't own them.
MCI, which ended the largest US bankruptcy in April, hired banks including Lazard LLC and JPMorgan Chase & Co. to help find a buyer, people familiar with the matter said.
MCI, formerly WorldCom, also retained Greenhill & Co. and law firm Davis Polk & Wardwell, said the people, who requested anonymity.
The company has already attracted one prospective buyer, Leucadia National Corp., which informed regulators in July that it may acquire more than 50 percent of MCI's stock.
But after making a brief regulatory filing indicating its interest in the telecommunications company, Leucadia has declined to comment further on its plans for MCI.
MCI is seeking more than $6 billion and could sell its consumer and corporate telephone operations separately, The New York Times reported yesterday.
Peter Lucht, an MCI spokesman, declined to comment.
Spokesmen for the securities firms also declined to comment.
"We are going to stay focused on what we're doing, and any other comment I would make would be inappropriate," said Capellas, who didn't name the advisers.
The company has "no intention" of spinning off its non-US operations or those aimed at providing services for large companies, he said.
"The international part is important to us," he said. "We have just talked about hosting and services, so we have no intention of spinning off those data centers."
