Intermedia Shares Up 46% on WorldCom Sale

Intermedia Communications Inc. shares jumped 46% after WorldCom Inc. said in a regulatory filing that it expects to finish buying the phone company in the first quarter. WorldCom, the nation’s No. 2 long-distance phone company, is buying Tampa, Fla.-based Intermedia mainly for its Digex Inc. Web-site management unit. Digex investors who favored a rival bid had threatened to sue WorldCom for $2.5 billion if the purchase is completed, leaving some investors to think WorldCom would abandon the purchase, analysts said. “Both parties are moving forward,” Intermedia spokesman Alan Hill said. “Investors feel much better.” WorldCom spokeswoman Claire Hassett declined to comment further. Fast-growing Digex, which hosts Web sites for companies, including Sony Corp. and Ford Motor Co., would offset declining telephone rates at WorldCom. Intermedia shares rose $2.25 to close at $7.19 in heavy Nasdaq trading. Clinton, Miss.-based WorldCom rose 13 cents to close at $14.06, and Beltsville, Md.-based Digex fell $3.50 to close at $22.50, both on Nasdaq.