MCI Launches Offer For More Digex Stake

Ashburn-based MCI, formerly known as WorldCom Inc., received bankruptcy court approval about three weeks ago to take its 80-cent-per-share offer directly to Digex shareholders.

Digex, based in Laurel, Md., hosts Web sites and applications for about 690 business and institutions around the world.

MCI said the purchase will enable it to expand its offerings of managed services, a key objective of its reorganization plan.

MCI already owns about 61 percent of the Digex common shares and 94 percent of the voting rights of the common stock.

It needs to acquire about 74 percent of the Digex shares it doesn't own for its campaign to succeed under the conditions of the agreement.

If successful, MCI would then purchase all the Digex preferred stock outstanding as part of an agreement with the holders of the preferred shares.

MCI then would merge Digex with Intermedia Investment, which it bought in July 2001 mainly to acquire its controlling interest in Digex, the motion said.

A special committee of Digex directors, made up of directors independent of MCI, reviewed the offer and is recommending Digex's shareholders approve the deal.

The offer is set to expire Sept. 24.

Shares of Digex closed at 78 cents, up 5 cents, or 6.7 percent, in over-the-counter trading.