MCI said looking for buyers

By Jeffry Bartash, CBS.MarketWatch.com
Sept. 20, 2004

WASHINGTON (CBS.MW) -- MCI reportedly is looking for a buyer and has hired a trio of law firms to help the company explore its options.

MCI, the company formerly known as WorldCom, would like to sell the entire company in one chunk but it might have to accept piecemeal dismemberment, according to a report in Monday's New York Times.

Even then, the company might not fetch its desired price of about $6 billion because of weakness in the phone industry.

MCI spokesman Peter Lucht declined to comment. The Times cited unidentified executives "involved in the sale process."

Wall Street analysts have long expected that MCI (MCIP: news, chart, profile) would be put up for sale once it got a clean bill of health, but it is by no means certain that the company will succeed. The company emerged from Chapter 11 bankruptcy protection earlier this year.

Still, regulatory roadblocks or the financial weakness of many potential acquirers could limit the pool of buyers. At the same time, MCI faces steady erosion in its consumer long-distance business, making that part of the company unattractive.

The best MCI assets revolve around the company's data and corporate-services segment.

The big local phone carriers Verizon (VZ: news, chart, profile), BellSouth (BLS: news, chart, profile) and SBC Communications (SBC: news, chart, profile) are best positioned to make an offer, but so far have been cool to the idea.

Still, MCI's corporate unit would give any Baby Bell a big lift in the one area where they are notably lacking: data and long-distance service to large multinational companies.

On Monday, shares of MCI rose 8 cents to $17.28 on the Nasdaq Stock Market.