BellSouth Pondering Bid for Sprint
BellSouth Corp., which provides local phone service in nine Southeastern states, is considering a bid for No. 3 U.S. long-distance carrier Sprint Corp., BusinessWeek Online reported, citing unnamed sources.
Sprint’s local, long-distance and wireless assets would give BellSouth the national and international reach it lacks, the magazine’s Web site said.
If MCI WorldCom Inc. moves to buy Sprint, BellSouth would then bid for parts of Sprint, such as the Internet assets MCI WorldCom may have to divest to win regulatory approval for the purchase, the Web site said.
However, BellSouth is unlikely to have its counteroffer ready before Sprint’s board is scheduled to meet Sunday, the site said.
MCI WorldCom and Sprint are discussing a merger that would give MCI WorldCom the wireless assets analysts and investors have said the company needs, a person familiar with the negotiations said late last week.
“For MCI, [buying Sprint] could fill in a couple holes,” such as wireless, said Jeffrey Kagan, an independent telecommunications analyst based in Atlanta. “For BellSouth, it would transform the whole company overnight.”
Sprint Chief Executive William Esrey, a former Warburg Dillon Read banker, is likely to leave the company after a merger with either MCI WorldCom or BellSouth, Kagan said. “Esrey is not going to share the captain’s chair with anybody, and he’s not going to take the No. 2 spot,” Kagan said.
A BellSouth-Sprint combination would give BellSouth a national wireless network, a national data network and “loads of long-distance customers right out of the gate,” Kagan said. “It would be exactly what the doctor ordered for BellSouth,” which has largely stayed out of the consolidation fray now raging in the telecommunications industry.
In addition, Sprint and BellSouth have similar corporate cultures, he said, which tend to be more conservative than the “rough-and-tumble” atmosphere of MCI WorldCom.
BellSouth, MCI WorldCom and Sprint all declined to comment.
Shares of Sprint, based in Westwood, Kan., rose $2.75 to close at $57 on the New York Stock Exchange.
Shares of Sprint PCS, the company’s Kansas City, Mo.-based wireless unit, closed up 94 cents at $75.50, also on the NYSE.
Shares of Atlanta-based BellSouth rose 38 cents to close at $45.38, while shares of MCI WorldCom, based in Clinton, Miss., fell $1.38 to close at $70.50 on Nasdaq.
