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IDT Seeking to Buy WorldCom Units

TSC Staff

IDT (IDT) announced Tuesday it was making offers for several units of battered telco WorldCom(WCOME).

IDT has forwarded to WorldCom CEO John Sidgmore a proposal to acquire its MFS and Brooks Fiber units and its MCI consumer and small business long-distance units for what IDT said was a total of $5 billion.

Like MCI, the Brooks Fiber and MFS units were acquired in WorldCom's acquisition spree in the late 1990s. WorldCom paid nearly $3 million for Brooks, which provides telephone services for businesses. MFS, acquired for $12 billion, is a leading carrier of Internet data.

WorldCom rocked the financial world last week when it announced it had inflated its earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of cash flow, by $3.8 billion over the past five quarters.

IDT, based in Newark, N.J., has operations including Internet-based telephone services and fiber-optic networks.

The company is now notorious for buying up the remains of failed telecom companies. It has bought assets from such one-time highfliers as Teligent and Winstar Communications.

IDT has a significant pool of cash after selling its stake in Net2Phone to AT&T(T).

In regular trading yesterday, IDT closed at $16.42, down 41 cents or 2.44%