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Tuesday, December 15, 1998

MCI WorldCom offers $323m for Australian Internet firm OzEmail 

REUTERS  
NEW YORK, DEC 14: US telecom giant MCI WorldCom Inc. said it has offered to buy Australia's top Internet service, OzEmail Ltd., for $322.8 million or $2.20 per share.

The firm, the second largest US long-distance telephone company, said the move was to strengthen its presence in the Asia-Pacific region.

The surprise offer comes after speculation a takeover bid might come from America Online Inc., the world's largest Internet service provider.

Cable & Wireless Optus Ltd., Australia's second largest telecommunications group, has also been mentioned as a possible suitor. Britain's Cable & Wireless Plc. owns 55.8 per cent of C&W Optus.

MCI WorldCom, which was created in a recent merger, said it would bid $2.20 a share for OzEmail and has already acquired a 14.9-per cent stake in the company.

The MCI WorldCom board has approved the deal, a spokesman said. It expects to begin a tender offer for shares of OzEmail towards the end of December.

Three OzEmail directors own 54 per cent of the company. Theysaid that in the absence of a higher offer, they intended to accept the MCI WorldCom bid.

The OzEmail board will make a recommendation to shareholders after reviewing the offer documents, the directors said.

If acquired by MCI WorldCom, OzEmail would become the Australian Internet operating arm of MCI WorldCom's UUNET Internet subsidiary. The Jackson, Miss. Company said it is currently laying out an Australian communications network that fits well with OzEmail's Internet presence.

America Online said in early October it planned to launch an Australian Internet service, AOL Australia, with European media group Bertelsmann AG.

A week later, OzEmail said it had been contracted to supply Internet services for a major American Internet service provider which had recently entered the Australian market. OzEmail's announcement followed rumours it might be in takeover talks with AOL.

Shares of OzEmail rose more than six per cent after their open on Monday in Australia, trading as high as A$3.60, up from aFriday close of $3.39.

MCI WorldCom shares closed at $64.375 Friday, up $1.625 on the Nasdaq exchange.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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