GTE Corp.’s offer for MCI Communications Corp. won early support from MCI shareholders eager to receive a record $28 billion in cash, even as speculation emerged that the bid may include some GTE stock.
GTE made an unsolicited bid for the nation’s No. 2 long-distance company of $40 a share Wednesday, two weeks after WorldCom Inc.
surprised MCI with an offer of $41.50 in WorldCom stock for each MCI share. British Telecommunications PLC in August revised its bid for the 80 percent of MCI it doesn’t already own to $35.88 a share in stock and cash.
GTE said it is open to negotiations with MCI on a combination stock and cash offer. MCI’s stock rose Friday as shareholders said that the GTE bid, whether it includes stock or not, will touch off a bidding war with WorldCom.
WorldCom will increase its bid to the “high 40s” because “they need to compensate for the increased financial risk,” in issuing shares, said Daniel Zito, an analyst at Legg Mason Wood Walker. WorldCom officials declined to comment.
MCI and BT said they’ve given each other consent to hold discussions with WorldCom and GTE, waiving a clause in their original merger agreement that barred them from talking to other parties. MCI also said its management and advisers will meet with GTE and WorldCom. BT said it is considering the effect of the bids on its plans.
