Qwest Makes Another Bid For MCI - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure
News
2/24/2005
05:55 PM
50%
50%

Qwest Makes Another Bid For MCI

Regional phone company increases cash portion of its offer in an effort to snatch the long-distance company from Verizon Communications.

Regional Bell company Qwest Communications International on Thursday revised its bid to acquire long-distance company MCI, increasing the cash portion of the offer in an effort to upset the deal between Verizon Communications and MCI.

Qwest is still offering $24.60 per share for MCI, but boosted the cash payment from $7.50 per share to $9.10 per share. Qwest didn't increase the overall value of its bid, which is still around $8 billion. MCI had previously rejected the Qwest proposal, accepting instead an offer from Verizon valued at around $6.75 billion.

In a letter sent to MCI's board, Qwest chairman and CEO Richard Notebaert noted that his company has been "denied access to MCI legal, financial and operational information." Nonetheless, Qwest was making a revised proposal that is "even more compelling for your stockholders."

A merger between Qwest and MCI "would create an exciting and important new telecommunications company with a strong market position," he wrote. Such a deal would pass regulatory review faster than a Verizon/MCI deal and "lead to fewer and less extensive divestiture demands." Notebaert also said Qwest will protect MCI shareholders from any potential decline in Qwest stock price.

MCI officials have said that joining with Verizon will produce a strong telecom company that can better compete in a rapidly changing marketplace, pointing out that Verizon is a much larger and financially stronger company than Qwest. Still, some MCI shareholders have objected to the company accepting the lower offer from Verizon, rather than the richer offer from Qwest.

Some analysts have predicted that a new bid by Qwest will force Verizon to increase its offer, but the company hasn't indicated whether it will do so. "I think most of us expected both Verizon and Qwest to fight for MCI over days or weeks and maybe even drive the price up. With Verizon and Qwest both wanting MCI, there is obviously a lot more value to squeeze out of this deal," telecom industry analyst Jeff Kagan said in an E-mail statement after Qwest's revised bid.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
IT Careers: 10 Industries with Job Openings Right Now
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/27/2020
Commentary
How 5G Rollout May Benefit Businesses More than Consumers
Joao-Pierre S. Ruth, Senior Writer,  5/21/2020
News
IT Leadership in Education: Getting Online School Right
Jessica Davis, Senior Editor, Enterprise Apps,  5/20/2020
White Papers
Register for InformationWeek Newsletters
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
Video
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
Slideshows
Flash Poll