Sprint's board met on Sunday in New York to weigh the two competing offers, and adjourned without a decision. But, barring a last-minute change, it is expected to formally vote for the MCI WorldCom proposal on Monday, at another scheduled meeting, since a special committee of the board voted unanimously to proceed with the WorldCom proposal, the source said.

Sprint is expected to proceed with a WorldCom bid even though the BellSouth offer, which offers stock and cash, is currently richer than the WorldCom offer, which is an all-stock offer that fluctuates in value along with WorldCom's stock price, people familiar with the matter said. Both bidders are vying for a company with more than $17 billion in annual revenue with a strong national long-distance and wireless business.

Each bidder would have regulatory problems to overcome. While WorldCom may have to divest itself of Sprint's Internet business, a BellSouth-Sprint pact could result in significant wireless divestitures or a possible spinoff.

Deal's possible value

Any deal would likely be one of the largest ever. The current offer from BellSouth is valued at about $72 billion, though it is possible that the corporation may try to sweeten its bid. The current bid includes a premium for Sprint's cellular unit but excludes the value of the unit's shares, which trade separately as a so-called tracking stock. The WorldCom bid is valued at about $65 billion using the same criteria. Sprint also has about $13 billion in debt that would be assumed by either bidder. Adding the nominal value of the PCS business, which isn't actually being acquired, would put the total value of any deal at more than $100 billion. BellSouth, Sprint and WorldCom wouldn't comment.

William Esrey, Sprint's chairman and chief executive officer, told directors that he favoured the WorldCom proposal because of the strategic fit, according to a person familiar with the matter. Esrey has acknowledged to WorldCom that he believes the size and scale of the combined company would give it a competitive edge. Together, the combination would create one of the biggest telecom companies in the world.

But Esrey may have problems with his partners France Telecom SA and Deutsche Telekom AG, which could complicate a transaction, given that it must be approved by shareholders representing a majority of shares outstanding.

Stephanie N Mehta & William Boston contributed to this article.

(The Wall Street Journal)