Allnet and Lexitel agreed in principle to merge.

Combined annual revenue of the two long-distance carriers will exceed $500 million, making it the nation’s fourth-largest carrier (after AT&T; Communications, MCI and GTE Sprint). Allnet shareholders are to receive $15 million in cash, $40 million stated value of 10% securities and 21.6 million shares of common stock in the new company. Lexitel shareholders will receive 21.6 million shares of the new company’s common stock. The combination is expected to be completed in November.