Richard Notebaert is not acting like the dejected wallflower whose date just waltzed off with another partner. On Monday, the chief executive...
CHICAGO — Richard Notebaert is not acting like the dejected wallflower whose date just waltzed off with another partner.
On Monday, the chief executive at Denver-based Qwest, learned that his company’s bid for long-distance company MCI lost to one from Verizon.
Don’t feel bad for Notebaert, the former Ameritech executive who sold the Midwest Baby Bell to SBC in 1999. “Two years ago, [Qwest was] written off as dead,” he said.
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That’s shortly after Notebaert took the helm at Qwest when the scandal-ridden phone carrier was skating close to bankruptcy.
Qwest’s MCI bid bolstered the egos of 40,000 Qwest employees, said Notebaert, who conceded that “the only thing better is had we been successful. We are disappointed.”
But not dejected. Indeed, Notebaert bridled at the suggestion that MCI’s executives may have used his offer as a lever to push Verizon into making a firm bid.
“If that’s how they used us, they didn’t do a very good job,” he said.
The Qwest chief said his firm’s offer for MCI included $1 billion in cash as well as equity in the merged firm, which was a richer offer than Verizon’s.
“If we were being used, they left a lot of money on the floor,” he said. “If I were an MCI shareholder, I’d be asking the board why they didn’t go back to Verizon, citing Qwest’s offer, and get more money. That’s how you use a stalking horse.”
Yesterday, some of MCI’s largest shareholders voiced disappointment with the Verizon deal, lending support to Notebaert’s position.
Bruce Berkowitz, president of Fairholme Capital Management, which owns 3.5 percent of MCI stock, told Bloomberg News that Verizon’s offer is “very disappointing to MCI owners” and suggested management should reconsider Qwest’s bid or remain independent.
John Paulson, whose Paulson & Co. owns 4.1 percent of MCI, told Bloomberg News that the Verizon/MCI merger may not be a done deal “because ultimately this is going to have to be approved by MCI shareholders. If Qwest puts its offer forward, I think there’s a good chance shareholders would prefer the Qwest alternative.”
Qwest puts quarter loss at $139 million
Qwest said yesterday it narrowed its fourth-quarter loss to $139 million.
For the September-December quarter, Qwest’s loss amounted to 8 cents per share, compared with a net loss of $407 million, or 23 cents per share, in the fourth quarter of 2003. Analysts projected a loss of 13 cents per share.
Revenue was $3.43 billion during the quarter, down 1.7 percent from $3.49 billion in the same quarter the year before. The company said that was the smallest year-to-year decline in the past eight quarters.
Qwest shares closed up 6 cents at $4.04.