WorldCom’s Ebbers Cuts Brash Figure
MCI Communications Corp. Chairman Bert C. Roberts Jr. wasn’t in his office when WorldCom Inc. CEO Bernard J. Ebbers telephoned Wednesday morning.
When Roberts returned the call around 8:30 a.m., Ebbers told him of WorldCom’s surprise bid of about $30 billion for MCI.
And, as Ebbers recounted in a press conference later Wednesday, there was another little message: “I did tell him that when he became a part of WorldCom, he’d have to come into work a little earlier.”
The needling sense of humor is in sync with the Canadian-born entrepreneur’s brash business style. Although Ebbers, 56, takes pains to argue that WorldCom is not a reflection of any one personality, he shares one salient attribute with the company that he has built: both are all teeth.
“He’s very aggressive, and he smells enormous opportunity now just due to the lack of decisiveness in the industry,” New Jersey-based telecommunications consultant Peter Bernstein said.
Wall Street has consistently rewarded that decisiveness, making WorldCom’s stock one of the most powerful currencies in American business today.
Its average yearly return to investors over the 10 years through 1996 was 53%, placing it second only to high-flying Oracle Corp. (53.5%) among the Fortune 500, and ahead of such marquee names as Microsoft Corp., Intel Corp. and Nike Inc.
At a trim 6 feet 4 inches with a rakish beard and ice-blue eyes, the former basketball coach is imposing enough in his own right. But wielding a weapon like WorldCom’s stock, Ebbers is a land shark.
WorldCom has racked up 40 acquisitions in the last five years, and its revenues have exploded to $4.5 billion last year from just $18 million in 1987. In the process, the Jackson, Miss.-based firm has become the nation’s fourth largest long-distance carrier, behind AT&T; Corp., MCI and Sprint Corp.
If it succeeds in its quest for MCI--thereby breaking up MCI’s pending merger with British Telecom--WorldCom will leap into the No. 2 spot.
Even so, WorldCom remains fairly obscure, although celebrity pitchman Michael Jordan and Ebbers himself are working in their own ways to remedy that.
Ebbers first came to Mississippi from his native Edmonton to play basketball at Mississippi College.
He later worked as a manager of some Best Western motels and moved into the phone business in 1983 as one of the original investors in Long Distance Discount Services, WorldCom’s predecessor. LDDS was best known for providing the hotline between the White House and the Kremlin.
Before Wednesday’s bid for MCI, WorldCom’s biggest deal was last year’s $12.5-billion acquisition of local phone operator MFS Communications. The purchase made WorldCom a major player in the Internet, through MFS’ UUNet unit, the largest provider of high-speed Internet “backbone services.”
WorldCom pounced again last month, announcing the $1.2-billion acquisition of struggling CompuServe Inc., which provides dial-up Internet access mainly for businesses. In step two of the deal, WorldCom traded CompuServe’s subscriber base to America Online in exchange for ANS Communications, AOL’s Internet backbone subsidiary.
The deals are coming so fast that the MCI bid overshadowed another major transaction also announced Wednesday: WorldCom will pay $2.4 billion in stock for St. Louis-based Brooks Fiber Properties Inc., a local phone company serving 44 smaller markets around the country.
Brooks Chief Executive James C. Allen said in an interview Wednesday that while he was impressed with Ebbers’ “straight-shooter” approach, “personal egos had nothing to do with [the deal]. It was stock performance.”
Allen predicted that WorldCom would succeed in its pursuit of MCI even though its opponent, British Telecom, is five times its size in revenues. WorldCom, said Allen, has an unmatched record of quickly integrating and profitably running the companies it acquires, which keeps the stock turbocharged.
In a switch from the jeans-and-cowboy-boots attire he favors around the office and on his Mississippi cattle ranch, Ebbers wore a tan suit and conservative tie for Wednesday’s press conference at the posh Pierre Hotel.
But the suit didn’t keep him from throwing a few elbows.
Asked if his goal was to “supplant” AT&T; as the industry leader, Ebbers shot back: “I wouldn’t want to supplant them. I would have their type of earnings then.”
Ebbers said British Telecom itself opened the door to WorldCom’s rival bid when the European phone giant reduced its offer for MCI by 18% six weeks ago, saying that it was unaware of the large losses MCI faced in local phone service.
“I don’t believe MCI shareholders are very happy,” Ebbers said.
A reporter asked whether there might be room for a three-way deal between WorldCom, MCI and BT.
Sure, Ebbers snapped. “After we get our deal finished with MCI we might acquire BT.”
