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Summary:

MCI is prepping itself up for sale? That’s the word fromThe New York Times which reports that “MCI has hired three investment banks, Lazard, Greenhill & Company and J. P. Morgan Chase, as well as the law firm Davis Polk & Wardwell, to help advise it […]

MCI is prepping itself up for sale? That’s the word fromThe New York Times which reports that “MCI has hired three investment banks, Lazard, Greenhill & Company and J. P. Morgan Chase, as well as the law firm Davis Polk & Wardwell, to help advise it and canvass for buyers.” The daily report is based on information from unnamed sources. MCI of course does not want to comment. The sale could be whole or in bits and pieces. The news of the sale should not come as a surprise to anyone for local and consumer long-distance business are going the way of Texas Rangers mounting a successful run for the pennant. Times speculates that obvious buyers could be the Baby Bells, since this would allow them to get into the lucrative business communications business, an area where they have struggled.

What will most likely happen, the executives said, is that MCI will try to sell its business services unit separately – potentially to a Bell or possibly to a technology company like Electronic Data Systems or even I.B.M. – and its consumer unit to a private equity firm, which would be attracted to its cash flow despite its dwindling business.

My best guess is that someone would step-up to the plate and snap-up UUNet business, maybe it will be Sprint or someone like that. I think their consumer and local infrastructure should be of interest to many, especially emerging giants from far away lands like India. Reliance Infocomm has global ambitions and this could fit the bill. I had heard a rumor to this effect sometime ago but did not put any credence to it. After all $6 billion is a big number.

  1. I am betting that CROWE would love that DIAL UP UUNET part of the MCI…………..

    Skibare

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  2. Don’t think level 3 either needs it or wants it. They have a pretty decent network themselves and don’t really need it for the pipes. the customers however are a whole different story.

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  3. If IBM buy’s it I’ll eat my hat, IBM got out of that game back in 1999. IBM is having too much fun forcing the industry in to commoditization and cheery picking the best bits.

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