A day after GTE's stunning $28 billion (£19 billion) offer for MCI Communications Wall Street experts were unwilling to predict the outcome of the takeover fight but said a long, drawn out battle was likely.
Officials at GTE, the US's third largest local telephone company, were meeting with financial analysts in New York to give details of the $40-a-share offer, which followed MCI's agreement to merge with British Telecom (BT).
GTE, based in Stamford, Connecticut, has set the stage for one of the biggest bidding wars in corporate history with its unsolicited offer for MCI, the US's second largest long-distance company.
After accepting an offer from BT nearly a year ago, MCI now faces the prospect of considering two higher bids.
Two weeks ago, fast-growing WorldCom, based in Jackson, Mississsippi, offered to buy MCI for $30 billion in stock plus $5 billion in assumption of debt.
The bids from WorldCom and GTE both top MCI's long-planned stock and cash transaction with BT, which is valued at about $21 billion.
Investors reacted in predictable fashion, driving MCI stock up another $1.625 to $38.50 after it rose $1.56 on Nasdaq on Wednesday. GTE fell $2.75 to $45.25 in consolidated midday trading on the New York Stock Exchange.
BT, which already owns 20 percent of MCI, saw its shares surge 25.5p to 471.5p sterling as dealers said it could only benefit from GTE's bid.
Wall Street experts said it was hard to say how the three-way tussle would turn out. But they said a long battle was likely, and they would not rule out another player jumping into the fray.
The next big development is expected to come from MCI, which said it was reviewing both the GTE offer and the WorldCom bid in the context of its planned deal with BT.
MCI was reported to have scheduled a board meeting for Friday, but that could not be confirmed.
Meanwhile, BT said it was considering its options.
WorldCom said its bid offered more value to MCI and its shareholders.
The fight for MCI comes in a booming year for mergers and acquisitions and marks the latest multibillion-dollar takeover announced recently around the world.
Telecommunications has been one of the hottest sectors for merger activity due, in part, to federal legislation in 1996 designed to open up the markets to new competition.
That overhaul, meant to spark new entries in the field and lower prices for consumers, so far has led only to a rash of consolidations.
Bell Atlantic on 14th August completed its $25.6 billion acquisition of Nynex, combining two of the nation's largest regional Bell phone companies in the east. SBC Communications, the regional Bell in the Southwest, last year, acquired Pacific Telesis Group for about $22 billion.
GTE said Wednesday it expected its MCI bid to pass regulatory hurdles and that needed financing would be readily available.
