MCI WorldCom mulls Orange bid

NEW YORK, APRIL 22: MCI WorldCom Inc, the No 2 US long-distance telephone company, is mulling a potential bid for British wireless carrier...

NEW YORK, APRIL 22: MCI WorldCom Inc, the No 2 US long-distance telephone company, is mulling a potential bid for British wireless carrier Orange Plc and has reportedly hired investment banker Salomon Smith Barney as its advisor.

Salomon has advised MCI in previous deals, including its talks last year with wireless carrier Nextel Communications Inc and its 1998 purchase of MCI Communications Corp. An MCI WorldCom spokesman declined to comment. A spokesperson for Salomon could not be immediately reached for comment.

MCI WorldCom, which plans to buy smaller rival Sprint Corp for 115 billion, previously said it wants to aggressively tackle the European wireless market and it would consider a bid for Orange. quot;We8217;re dead serious about wireless in Europe8230;we think it8217;s going to be a tremendous opportunity,quot; MCI WorldCom chief executive Bernie Ebbers told investors at the CS First Boston telecommunications conference in New York last month.

quot;We will certainly be there when Orange Plc comes around,quot; Ebbers said. Orange is currently owned by Germany8217;s Mannesmann AG. To gain regulatory approval for the planned merger of Mannesmann and Vodafone AirTouch Plc, the companies are forced to demerge or sell Orange.

MCI WorldCom continues to weigh a potential bid for Orange, but no decision has been made. Any offer would likely wait until after US and European regulators review the MCI-Sprint merger, the source said.

MANY SUITORS CIRCLE ORANGE: MCI WorldCom, which earlier this month quit the increasingly-expensive auction of UK wireless telephone licenses, would face stiff competition in the pursuit of Orange.

Hans Snook, chief executive of Orange Plc, told Reuters on Wednesday he has been in talks with more than 10 potential bidders, but he insisted a takeover of Britain8217;s youngest mobile phone company is far from certain.

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Snook says he has spoken with MCI WorldCom chief executive Bernie Ebbers and met France Telecom chairman Michel Bon. He declined to discuss the timing or content of the discussions. France Telecom said on Thursday it may bid for Orange, but a decision would not be made until the end of the British auction for UMTS Universal Mobile Telecommunications Systems licenses.

Spain8217;s Telefonica SA, meanwhile is lining up a multi billion dollar loan to back a bid for Orange, banking sources in London said on Thursday. Other potential contenders for Orange include Dutch carrier KPN, Finland8217;s Sonera, and Japan8217;s NTT DoCoMo.

Despite the ongoing takeover speculation, Orange has said it was looking forward to returning to the stock market as an independent company. A stock market relisting is more likely than Orange being sold to another carrier, an industry source said in London.