Just days after a little-known investment firm signaled its interest in acquiring control of MCI Inc., one of the telecommunications giant's largest shareholders announced it would be willing to consider a sale of the company.
In a filing with the Securities and Exchange Commission, MatlinPatterson LLC said it may enter discussions about "an extraordinary corporate transaction, such as a recapitalization, merger or reorganization," involving MCI or any of its subsidiaries.
It was not clear why MatlinPatterson, which owns 5.7 percent of MCI's common stock and more than $300 million in corporate bonds, issued the statement. Calls to the New York hedge fund were not returned. MCI declined to comment.
MatlinPatterson has been selling shares of Ashburn-based MCI since the long-distance company emerged from bankruptcy in April. MatlinPatterson was once MCI's largest creditor. Now it is its third-largest stakeholder.
The MatlinPatterson filing comes just days after Leucadia National Corp. sought antitrust clearance to acquire a controlling stake in MCI. By signaling that it is willing to consider a sale, MatlinPatterson is likely to add new fuel to speculation that MCI is on the auction block. Shares of MCI rose 2 cents yesterday, or less than 1 percent, to close at $16.95.
MCI began trading for the first time in two years this week under its new symbol, MCIP. The company was delisted in July 2002 after reporting accounting fraud and filing for bankruptcy protection.
MatlinPatterson acquired its stake in MCI during the bankruptcy process, when it bought up its debt for pennies on the dollar.
MCI could block a takeover attempt by using a provision that allows it to issue more shares of stock whenever an outsider acquires more than 15 percent of the company -- making a controlling stake prohibitively expensive. The so-called "poison pill provision" was put in place to ward off hostile bids that are deemed to undervalue the company. The company's reorganization estimated MCI to be worth about $12 billion. But based on yesterday's closing price, investors are valuing the nation's third-largest long-distance company at about $5.5 billion.
In its filing, MatlinPatterson said it would also be willing to discuss a change to MCI's bylaws, "including changes that may impede or facilitate the acquisition of control" of the company.