IDT Seeking to Buy WorldCom Units
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%
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