CLINTON, Miss., May 28, 1999 - MCI WORLDCOM, Inc. (NASDAQ:WCOM)
and SkyTel Communications, Inc. (NASDAQ:SKYT) announced a definitive
agreement to merge the two companies.
Under the terms of the agreement, holders of SkyTel common stock
will be entitled to receive shares of MCI WorldCom common stock for
each share of SkyTel common stock. Based on the average trading price
for MCI WorldCom common stock on May 27, the merge r values each share
of SkyTel common stock at $21.24.
The common stock exchange ratio will be fixed at 0.25 shares of MCI
WorldCom common stock for each share of SkyTel common stock, so long as
the average trading price for MCI WorldCom common stock is greater than
$80.00 per share during the 20 trading days ending three trading days
prior to the closing of the merger. If MCI WorldCom's average
trading price is between $72.00 and $80.00 per share, the exchange
ratio will be increased to a number of MCI WorldCom shares equal to
$20.00 divided by the average p rice. If the average trading price for
MCI WorldCom common shares is less than $72.00 per share, the exchange
ratio will be fixed at 0.2778 shares of MCI WorldCom common stock for
each share of SkyTel common stock.
Holders of SkyTel $2.25 Cumulative Convertible Exchangeable
Preferred stock will be entitled to receive one share of MCI WorldCom
preferred stock for each share of SkyTel preferred stock that they own.
The MCI WorldCom preferred stock will be convertible into MCI WorldCom
common stock on a basis that gives effect to the exchange ratio in the
merger and will otherwise have the same terms as SkyTel's preferred
stock.
MCI WorldCom and SkyTel, both headquartered in the Jackson
metropolitan area, have longstanding business ties. MCI WorldCom is
currently the largest reseller of SkyTel services.
MCI WorldCom President and CEO Bernie Ebbers said the acquisition is
an important building block in the company's overall wireless
strategy, which also includes fixed wireless technology. "SkyTel
is the industry leader in wireless messaging, and is ahead of the curve
in developing and implementing wireless data applications. In addition
to its unique product offering, its key assets, its customer base of
1.6 million subscribers and annual revenues in 1998 of $518 million,
SkyTel also brings a talented management team with a wealth of
experience in wireless communications."
"MCI WorldCom is an aggressive company with an unparalleled
long-term history of creating value for customers, shareholders and
employees," commented John Palmer, SkyTel Chairman. "MCI
WorldCom brings SkyTel a host of technical synergies, like cost-effec
tive local telephone numbers, robust Internet services, and of course,
expanded distribution and marketing muscle to help increase awareness
of wireless messaging."
MCI WorldCom expects the transaction to be accretive to earnings
immediately upon closing.
The Boards of Directors of both companies have approved the merger.
Consummation of the merger is contingent on approval of the Department
of Justice and Federal Communications Commission, as well as SkyTel
shareholder approval. The transaction is expect ed to be completed in
six to nine months.
The parties expect to account for the deal as a pooling of
interests. SkyTel is being advised by the investment banking firm,
Warburg Dillon Reed.
SkyTel is a leader in wireless messaging, serving more than 1.6
million customers. Since 1989, SkyTel has led the industry toward true
nationwide messaging through a series of innovations that culminated in
SkyTel two-way interactive messaging service. T his enables customers
to exchange messages with the Internet and other pagers, receive
messages via email and the Internet, and send messages to any telephone
in the United States. SkyTel is headquartered in Jackson, Miss., and
had 1998 revenue of $518 m illion. For more information about SkyTel,
please visit our web site at http://www.skytel.com.
MCI WorldCom is a global leader in communications services with 1998
revenues of more than $30 billion and established operations in over 65
countries encompassing the Americas, Europe and the Asia-Pacific
regions. MCI WorldCom is a premier provider of f acilities-based and
fully integrated local, long distance, international and Internet
services. MCI WorldCom's global networks, including its
state-of-the-art pan-European network and transoceanic cable systems,
provide end-to-end high-capacity connectivi ty to more than 40,000
buildings worldwide. MCI WorldCom is traded on NASDAQ under WCOM. For
more information on MCI WorldCom, visit the World Wide Web at
http://www.wcom.com.
Information contained in this release with respect to the expected
financial impact of the proposed transaction is forward-looking. These
statements represent the company's reasonable judgement with
respect to future events and are subject to risks and u ncertainties
that could cause actual results to differ materially. Such factors
include, but are not limited to, material adverse changes in economic
and competitive conditions in the markets served by the companies,
material adverse changes in the busin ess and financial condition of
either or both companies and their respective customers, uncertainties
concerning technological changes and future product performance, and
substantial delay in the expected closing of the transaction.
