LDDS Communications To Buy IDB

[AP]

CULVER CITY, Calif. (AP) -- LDDS Communications Inc., the
nation's fourth-largest long distance company, agreed Monday to
acquire IDB Communications Group Inc. in a stock swap worth about
$700 million.
Bernard J. Ebbers, chief executive of Jackson, Miss.-based LDDS,
said the deal ``is only a first step'' in LDDS' expansion into
international business. IDB is a satellite-based phone company with
extensive operations abroad.
The deal is a tax-free exchange of stock.
IDB shareholders will receive at least 0.450867 LDDS share for
each IDB share if LDDS shares are valued at $22 or more, or a
maximum of 0.520231 LDDS share if LDDS shares are valued at $16 or
less.
At current prices, the stock swap totals about $700 million,
said IDB senior vice president Peter Hartz. In addition, $195
million in convertible bonds issued by IDB will remain outstanding.
``The marriage of IDB's international network and the LDDS
domestic network will make the company a significant competitor in
the industry,'' said IDB chairman and chief executive Jeffrey P.
Sudikoff.
LDDS previously had to pay IDB for overseas satellite
connections to customers.
It had been widely reported that LDDS was in takeover talks with
IDB. Both companies' shares are widely held by institutional
investors, who seemed little surprised by Monday's announcement.
IDB shares closed up 12 1/2 cents at $9.50 in Nasdaq trading, while
LDDS shares were unchanged at $19.50 on the Nasdaq stock market.
Culver City-based IDB had been trading at more than $14 a share
before its disclosure in June that its auditor quit over questions
about its finances. Ebbers said LDDS examined that issue before
agreeing to acquire IDB.