The business world hasn’t seen anything quite like WorldCom’s
audacious bid for MCI, its US telecoms rival. Worth more than dollars 30
billion, it beats Kohlberg Kravis Roberts’ dollars 25 billion buyout of
R. J. R. Nabisco ten years ago as the biggest takeover in history.
The bid trumps BT’s dollars 24 billion proposed merger with MCI - the
biggest ever transatlantic deal - and leaves BT’s international strategy
in tatters.
This is a poker game for huge stakes, with giant clashing egos, and
demands that no issue be unexplored. Who is Bernard Ebbers, the
interloper’s cowboy-booted chief executive? How has he built WorldCom
from nothing in just five years? Is this upstart company, of Jackson,
Mississippi, a stockmarket bubble waiting to burst? Crucially, how can
BT salvage its year-long deal after knocking down MCI’s price a few
weeks ago? With MCI in trouble itself, is WorldCom’s strike really a
blessing in disguise?
The Financial Times these days is a pale pink shadow of the paper it was
a few years ago, when its investigative team was breaking award-winning
scoops. On a big corporate story like this, however, you expect its
coverage to be unrivalled - and it is.
It’s not just that the ’pink un’ has more space, more staff and
unparalleled boardroom access. No, its editorial direction is superb,
breaking out all the angles in easily digestible chunks across two days
of full-page analysis. Here it easily beats its main international
rival, the Wall Street Journal, against which it is now going head to
head in the US.
The FT’s Thursday front-page splash covers the gamut of BT’s surprise,
the blow to its ambitions and Ebbers’ ’joke’ about a bid for BT itself -
all accompanied by great graphics. Analysis describes WorldCom’s rise,
BT’s options, the cunning arbitrageurs and more.
On Friday, the FT’s excellent New York correspondent, William Lewis,
moves the story forward, with WorldCom’s court assault on MCI’s ’poison
pill’ defences, including a dollars 450 million abort fee for BT.
Meanwhile, the influential comment column, Lex, takes a pop at MCI’s
inflated share price and BT’s arrogant silence. It’s always been ’good
to talk’, except at BT’s headquarters.
The WSJ does not break its seamless copy up into easily readable
bites.
The US-style front page, with its columns of ’news in briefs’
cross-referring to stories inside, is also harder on the eye. However,
it does describe Ebbers superbly as the former basketball coach who
’scratched out his strategic plan on the back of a napkin in a diner in
Jackson, Mississippi’ and ’asked a waitress to name his company’.
For journalists in the first line of financial newsgathering - the
international wire agencies - Ebbers certainly dished up a novel
experience. On Wednesday 1 October, the bid was posted not on Wall
Street or the Stock Exchange, but on the Internet at the crack of dawn,
US time.
Fitting, perhaps - WorldCom is now the biggest force on the Net - but a
route which left news agencies groping in the dark as BT and MCI shares
motored ahead on what, at first, seemed little more than unsubstantiated
rumour.
For corporate news, Reuters is still the agency to beat. For those used
to an elegant newspaper read, newswire style is bleak and factual. That
doesn’t matter, facts are what the dealers want to help them make
instant decisions.
First, the one line ’alert’ with the key essential, the price. After the
bare bones, Reuters is quick to provide BT’s unhappy chronology of
international dreams, a profile of the thwarted chief executive, Sir
Peter Bonfield, and the implications for its European ventures.
As the day unwinds, Reuters produces well-crafted, stand-back pieces,
not just for the markets but for its other major customer, the
international press. There are some great quotes - ’they can’t outbid
WorldCom without looking like the Keystone Cops’ - which will get great
play (that is, be ripped off) by the next day’s UK papers.
If there’s one criticism, it is that the analysis is not pursued
analytically.
There’s the kernel of some great stuff about BT’s tough choices, for
example, but it simply peters out into a string of analysts’ quotes.
This lazy style is endemic to much agency copy - you simply wouldn’t get
away with it in a newspaper.
Bloomberg of the US is fast overtaking Reuters’ more established rivals
such as AP Dow Jones, Telerate and Knight Ridder. Bloomberg’s strength
is the bond markets but it has been expanding its mainstream
coverage.
On a huge international story, you would expect it to match Reuters. It
doesn’t.
Five days later, Bloomberg is still playing catch-up on the European
angle, which is now old news. Admittedly, BT and MCI are playing it
tight-lipped, but by Sunday it has no reaction at all.
European Business News was the first of several dedicated business TV
channels to spring up on cable. All are struggling to lift pan-European
audiences but EBN, drawing on the resources of Dow Jones, is probably
the best.
This is noticeably cheap television. However, EBN’s London presenter,
Denise O’Callaghan, is a professional interviewer with a thorough grasp
of the subject. In a few minutes, she covers all the implications, right
through to the US mergers likely to follow. This is one of the best
pieces I’ve seen on a growing medium that so often looks dull and
amateur.
As for the weekly business journals, the timing could not have been
worse.
As the story broke, both the Economist and the revamped European were
both going to press. (The huge weekday coverage leaves little new for
Sunday newspapers either, but at least it’s a running story and Sunday
papers have more feature space than the dailies, while the general
reader won’t have seen the FT.)
A week later, the Economist could have done better than practically
ignoring the story. The European took the opposite tack. It had a bold
cover-story stab at the Continental dimension.
There’s life in the European yet and, likewise, the US’s usually staid
Business Week. Its colour cover picture of Ebbers (a Country ’n’
Western-style ’Telecom Cowboy’) and a special report inside left its
prestigious rivals, Fortune and Forbes, simply hanging on the line.
(This feature went to press on the day it was announced the GTE
Corporation put in a pounds 17 billion cash offer for MCI.)
