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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 14, 1997
WORLDCOM, INC.
(Exact Name of Registrant as Specified in its Charter)
Georgia 0-11258 58-1521612
(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification Number)
Incorporation)
515 East Amite Street
Jackson, Mississippi 39201-2702
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (601) 360-8600
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ITEM 5. OTHER EVENTS.
On October 14, 1997, WorldCom, Inc. issued a press release, a copy of
which is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 7 (c) EXHIBITS.
The following exhibits are filed herewith in accordance with Item
601 of Regulation S-K:
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Exhibit No. Description
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<S> <C>
99.1 Press release dated October 14, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WORLDCOM, INC.
By: /s/ SCOTT D. SULLIVAN
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Scott D. Sullivan
Chief Financial Officer
October 14, 1997
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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99.1 Press release dated October 14, 1997.
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FOR MEDIA: FOR INVESTORS:
Josh Howell, (601) 360-8750 Gary Brandt, (601) 360-8544
Mark Weeks, 011-44-171-570-5700
Joele Frank, Abernathy/MacGregor, (212) 371-5999
Lucas van Praag, Brunswick Group, 011-44-171-404-5959
FOR IMMEDIATE RELEASE
WORLDCOM COMMENCES MAILING OF PRELIMINARY PROXY STATEMENT AND PRELIMINARY
EXCHANGE OFFER PROSPECTUS TO MCI SHAREHOLDERS
Jackson, Miss., October 14, 1997 -- WorldCom, Inc. (NASDAQ: WCOM)
announced today that it is mailing to all MCI shareholders its preliminary
proxy statement and preliminary exchange offer prospectus with respect to its
offer to acquire all of the outstanding shares of MCI Communications
Corporation (NASDAQ: MCIC) for $41.50 of WorldCom common stock per MCI share.
WorldCom's offer represents a 41% premium to MCI's closing stock price on
September 30, 1997. The transaction is valued at approximately $30 billion --
a premium of $9 billion to how the market valued the proposed acquisition of
MCI by British Telecom. The transaction will be accounted for as a purchase
and will be tax-free to MCI's shareholders.
Attached is the letter WorldCom sent today to MCI shareholders:
October 14, 1997
Dear MCI Shareholder:
As you are aware, on October 1, 1997, WorldCom announced that it will be
commencing an exchange offer to acquire all of the outstanding shares of MCI
Communications Corporation for $41.50 of WorldCom common stock per MCI share
(subject to adjustment as described in the enclosed materials). WorldCom's
combination with MCI will create one of the world's premier communications
companies, offering a full range of local, long distance, Internet and
international services.
We have enclosed for your information our preliminary proxy statement and
preliminary exchange offer prospectus which contain detailed information
regarding the WorldCom proposal. You may receive the materials under separate
cover if your shares are maintained by your brokerage firm, bank or trust
company.
In accordance with U.S. securities laws, the preliminary proxy
statement does not include a proxy card. Once our proxy statement
becomes definitive, you will receive another copy along with our WHITE
proxy card which you can use to vote your shares.
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On October 10, 1997, MCI announced that the MCI board of directors
requested its advisors to analyze further the details of the WorldCom proposal.
Following such review, MCI may be soliciting your vote in favor of the British
Telecommunications plc (BT) acquisition of MCI. In such event, we will be
mailing to MCI shareholders of record definitive proxy materials. At that
point, you will have the opportunity to vote against the BT acquisition of MCI.
WorldCom cannot complete its exchange offer if the MCI shareholders approve the
BT acquisition. However, based on the strong support we have received from the
financial community as well as the very favorable reaction from MCI's
shareholders, we believe MCI shareholders will vote down the BT acquisition.
The choice for the MCI board will be clear -- to respect your vote and allow
the WorldCom offer to proceed.
WORLDCOM OFFERS MCI SHAREHOLDERS A SUPERIOR
DEAL WITH GREATER POTENTIAL VALUE
HIGHER PRICE AND VALUE: The WorldCom proposal produces a significantly higher
premium than the BT proposal. By supporting WorldCom's proposal, MCI
shareholders will receive a better performing stock and will own a
significantly higher proportion of WorldCom than they would of a combined
BT-MCI entity.
o Based on closing stock prices on September 30, 1997, WorldCom's
offer represents over a $12 per share premium to the value in the
market of BT's acquisition proposal -- that's a $9 billion
premium to the proposed BT acquisition.
o Unlike BT's acquisition proposal, WorldCom's offer is structured
to be totally tax-free to MCI shareholders.
o WorldCom's transaction can close on essentially the same time
frame as BT's acquisition of MCI.
BEST PERFORMING STOCK: WorldCom is dedicated to the creation of shareholder
value and has the strongest track record in the industry for stock performance.
o WorldCom has provided investors with a total compound annual
return of 55.8%, compared to 4.3% for MCI and 9.4% for BT, since
the beginning of 1990.
o Under WorldCom's offer, MCI shareholders will receive a stock with
greater value today that is better positioned to realize higher
returns in the future.
FAR MORE SYNERGIES: Our proposal offers greater identifiable synergy benefits
than the BT proposal, as described in greater detail in the enclosed materials.
o By 1999, synergies in a WorldCom-MCI merger are expected to reach
at least $2.5 billion; by 1999, synergies in a BT acquisition of
MCI are estimated at only $400 million.
o Over five years, WorldCom-MCI's synergies are expected to total at
least $15 billion, compared to $2.4 billion for BT's proposed
acquisition.
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UNIQUE STRATEGIC FIT: Together, WorldCom and MCI will have the capital,
marketing abilities and state-of-the-art network to compete more effectively
against the incumbent carriers, domestically and abroad.
o Unlike BT, WorldCom is already a seasoned competitor in the U.S.
local market with an established presence in 52 local markets that
will expand to 86 markets following completion of the Brooks Fiber
acquisition.
o WorldCom's local network both accelerates MCI's local strategy and
results in significant savings for the combined company.
o WorldCom and MCI share similar legacies: pioneering the
introduction of competition to the telecommunications marketplace
and histories of innovation, agility and growth.
o MCI's management and employees will be an important part of the
combined company.
SUPPORT A SUPERIOR OFFER
We urge you to read the enclosed materials carefully. If you have any
questions about the materials please contact MacKenzie Partners, Inc. toll-free
at (800) 322-2885 or collect at (212) 929-5500.
Sincerely,
/s/ BERNARD J. EBBERS
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Bernard J. Ebbers
President and Chief Executive Officer
DON'T JUST TAKE OUR WORD FOR IT. HERE'S WHAT THE
EXPERT FINANCIAL ANALYSTS HAVE PUBLICLY SAID:
"We expect [WorldCom's] strong long-term momentum potential to
drive the stock to a $100 per share price target within four years.
Based on what we've seen so far, a potential MCI merger might even
accelerate our aggressive long term price target."
Richard Klugman, Goldman, Sachs & Co., October 1, 1997
"There should be tremendous savings on MCIC's local effort as
various costs associated with the launching of a local offering will
be reduced. Furthermore, unlike BTY, WCOM should not incur the huge
amount of dilution for local entry as many overlaps will be
eliminated."
Dan Reingold, Merrill Lynch, October 1, 1997
"We believe WCOM's exchange offer is favorable from a MCIC
shareholder point of view. Aside from the fact that WCOM offered a
much higher premium than BTY's current offer (41% compared to 7.8%
based on September 30th close), we believe MCIC shareholders would
look favorably on a greater ownership interest in WCOM, roughly 45%
compared to 20% stake in BTY. We also believe MCIC shareholders would
prefer owning WCOM, which is a higher growth company than BTY."
Linda Meltzer, UBS Securities, October 2, 1997
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"WorldCom's mantra of increasing shareholder return lends
credibility to this accretive expansion strategy and makes the company
a must-own stock to participate in the emerging communications
revolution, in our opinion."
Raghu Ram, Wheat First Butcher Singer, October 2, 1997
"An MCI acquisition would be wildly accretive to earnings in 1999
and beyond. Our 1999 and 2000 pro forma EPS numbers are $1.90 and
$2.80 respectively. Revenue growth of 16-20% seems likely over the
next few years."
Timothy Weller, Donaldson, Lufkin & Jenrette, October 2, 1997
"WorldCom is rated buy and is our single best idea in the wireline
telecommunications services industry." "The completion of the MCI deal
could raise our target price on these shares considerably, to perhaps
the $60 range." "We strongly recommend purchase of these shares. We
think WorldCom deserves a premium multiple due to its projected rapid
growth rate."
Guy W. Woodlief, Prudential Securities, October 3, 1997
"We believe WorldCom's unsolicited bid of $41.50 per share...for
MCI...reflects a superior value proposition for MCI shareholders,
management and customers. We see no comparable business case for
British Telecom to justify a higher bid because the firm has no local
presence in the United States."
William Vogel, Montgomery Securities, October 3, 1997
".... more value is created through a WorldCom/MCI marriage than
through a BT/MCI marriage because of superior operating and capital
efficiencies and the ability to accelerate the revenue growth of the
combined WorldCom/MCI over the sum of the growth rates of WorldCom and
MCI independently." "In our opinion, the WorldCom exchange offer
creates more long-term value for MCI than the BT merger would."
Eric Strumingher, PaineWebber, October 7, 1997
The above statements are extracts from published reports. Permission to use
these quotes has neither been solicited nor obtained.
WorldCom is a global telecommunications company. Operating in more
than 50 countries, the company is a premier provider of facilities-based and
fully integrated local, long distance, international and Internet services.
WorldCom's subsidiary, UUNET Technologies, Inc., is an international provider
of Internet services with over 1,000 Points of Presence (POPs) throughout the
United States and in Canada, Europe and the Asia-Pacific region. WorldCom's
World Wide Web address is http://www.wcom.com. The common and depository
shares of WorldCom trade on the NASDAQ National Market (US) under the symbols
WCOM and WCOMP, respectively.
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